If free community teaching improves students’ learning, why may GDP not fully reflect it?
Answer and explanation
Correct answer: Because the service was provided without payment
GDP measures the market value of final goods and services exchanged for money. Free community teaching can improve skills, productivity, opportunities, and welfare, but no market payment is made for the service, so its direct value is generally not included in measured GDP. Therefore D is correct. A, B, and C do not explain the measurement rule governing national income accounting.
Frequently asked questions
What is the correct answer to this question?
Because the service was provided without payment
Why is this the correct answer?
GDP measures the market value of final goods and services exchanged for money. Free community teaching can improve skills, productivity, opportunities, and welfare, but no market payment is made for the service, so its direct value is generally not included in measured GDP. Therefore D is correct. A, B, and C do not explain the measurement rule governing national income accounting.
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.
