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In which situation may measured GDP rise while the actual quantity of services remains nearly unchanged?

Answer and explanation

Correct answer: When unpaid household service begins to be purchased from the market

GDP generally records market transactions with observable monetary values. When a household member performs a service without payment, it is usually outside measured GDP; if the same activity is later purchased from a market provider, a recorded expenditure and market value appear. The underlying service quantity may be nearly unchanged, but measured GDP rises because of marketisation. Thus C is correct. A and B reduce recorded market activity, while D cannot raise GDP.

Related tags

MarketisationHousehold ServicesMeasured GdpNon-Market ProductionGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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