If free online learning materials improve education, why may GDP understate the benefit?
Answer and explanation
Correct answer: Because free content is recorded at little or no market value
GDP mainly records market-valued production and expenditure. Free online learning can improve knowledge, skills and educational opportunities, but when users pay nothing, the service may have little or no recorded market price. Its social benefit can therefore exceed its contribution to measured GDP. Option C is correct; the other choices are false generalizations or irrelevant.
Frequently asked questions
What is the correct answer to this question?
Because free content is recorded at little or no market value
Why is this the correct answer?
GDP mainly records market-valued production and expenditure. Free online learning can improve knowledge, skills and educational opportunities, but when users pay nothing, the service may have little or no recorded market price. Its social benefit can therefore exceed its contribution to measured GDP. Option C is correct; the other choices are false generalizations or irrelevant.
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.
