If household work is performed unpaid by family members, what is its effect on GDP and welfare?

Correct answer: It is excluded from GDP but may contribute to welfare

The governing concept is the distinction between market production and non-market household services. Unpaid cooking, cleaning, or caregiving usually has no recorded market transaction and is therefore excluded from measured GDP. Nevertheless, these services satisfy wants and save household expenditure, so they can raise actual welfare. Option B is correct; A wrongly says the work is included, C confuses GDP measurement with welfare, and D is incorrect because nominal GDP does not specially include unpaid work.