If a person leaves a low-paid job to provide unpaid family care, what effect on GDP and welfare is possible?
Answer and explanation
Correct answer: GDP may fall while family welfare rises
GDP generally records market-valued production, so the wages and measured output from the job may disappear when the person leaves it. Unpaid household care is often not included in conventional GDP, even though it can provide valuable services, emotional support, and security. Therefore, measured GDP may decline while the family’s actual welfare improves. The word “may” is important because the outcome depends on the value and effects of the care.
Frequently asked questions
What is the correct answer to this question?
GDP may fall while family welfare rises
Why is this the correct answer?
GDP generally records market-valued production, so the wages and measured output from the job may disappear when the person leaves it. Unpaid household care is often not included in conventional GDP, even though it can provide valuable services, emotional support, and security. Therefore, measured GDP may decline while the family’s actual welfare improves. The word “may” is important because the outcome depends on the value and effects of the care.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
