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Why may measured GDP rise if unpaid family eldercare is replaced by a paid institution?

Answer and explanation

Correct answer: Because the service is now recorded at a market price

GDP mainly records market-valued final goods and services. Unpaid care provided within a household may create real value but usually has no recorded market transaction. When an institution is paid to provide the same or a similar service, the payment and measured value of that service enter national output. Thus B is correct; the change does not prove that elderly numbers fell, unpaid care was harmful, or welfare necessarily improved.

Related tags

Unpaid CareMarket ServiceGdp MeasurementGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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