The issue of a free online educational video made and provided freely is related to what limitation in GDP measurement?
Answer and explanation
Correct answer: Difficulty in valuing a free or non-market digital service
GDP attempts to measure the market value of final goods and services produced during a period. A freely created educational video may provide substantial economic and social benefit, but no market price or payment may be recorded for it. Consequently, its value can be omitted or understated in GDP. This illustrates the limitation of GDP in measuring non-market and freely available digital services, so option A is correct.
Frequently asked questions
What is the correct answer to this question?
Difficulty in valuing a free or non-market digital service
Why is this the correct answer?
GDP attempts to measure the market value of final goods and services produced during a period. A freely created educational video may provide substantial economic and social benefit, but no market price or payment may be recorded for it. Consequently, its value can be omitted or understated in GDP. This illustrates the limitation of GDP in measuring non-market and freely available digital services, so option A is correct.
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.
