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In which example may actual welfare exceed recorded GDP?

Answer and explanation

Correct answer: Volunteers providing free educational services

GDP measures market-valued final goods and services, but it does not fully capture unpaid or non-market benefits. Volunteer teaching creates educational and social value even though no market payment is made, so the service may be absent from recorded GDP while increasing actual welfare. Pollution, crime-related security spending and deforestation can raise measured transactions but may reduce welfare through illness, insecurity or environmental loss.

Related tags

Non-Market ServiceVolunteer EducationGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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