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In one country much household work is unpaid while in another the same services are purchased in markets. Despite equal real services whose GDP will appear higher?

Answer and explanation

Correct answer: The country purchasing services in markets

GDP records most paid market production, including purchased childcare, cooking, cleaning, and repair services. Comparable unpaid household work usually has no market transaction and is therefore excluded from measured GDP, even though it creates real services and may contribute substantially to welfare. Consequently, option C is correct. This is why GDP comparisons can be distorted when countries differ in the extent to which household work is commercialized.

Related tags

GdpWelfareHousehold-WorkMarketisationComparisonGdp And WelfareNational Income And Related AggregatesEconomics

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