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Why may measured GDP rise if many household services shift from unpaid work to paid market services?

Answer and explanation

Correct answer: The value of previously non-market services begins to be recorded in the market

The governing concept is the coverage of national income accounting. Unpaid household work may provide real services, but its imputed value is generally excluded from measured GDP. When the same activity is purchased in the market, a recorded payment and market value enter GDP, even if the physical service has not increased. Therefore D is correct; the other choices claim effects that are not necessary.

Related tags

MarketisationHousehold ServicesMeasured GdpGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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