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If household members cook without pay and the same service is later purchased in the market, what may happen?

Answer and explanation

Correct answer: GDP will rise even if the amount of cooking service stays the same

Unpaid household services are generally not included in GDP because they have no market transaction or observed price. When the same cooking service is purchased, its market value is recorded in GDP. The amount of service may stay the same, so GDP can rise without a corresponding increase in actual welfare. B is correct.

Related tags

Unpaid Household WorkGdp MeasurementGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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