Which activity increases welfare but is not included in GDP?
Answer and explanation
Correct answer: Care of children by a mother at home
GDP counts market-valued final goods and services. Unpaid household work, such as a mother caring for children at home, can create real welfare and save families from purchasing care, but it normally has no recorded market transaction. Therefore option B is correct. Factory production, shop sales and a lawyer’s paid service are market activities whose final value is recorded in GDP.
Frequently asked questions
What is the correct answer to this question?
Care of children by a mother at home
Why is this the correct answer?
GDP counts market-valued final goods and services. Unpaid household work, such as a mother caring for children at home, can create real welfare and save families from purchasing care, but it normally has no recorded market transaction. Therefore option B is correct. Factory production, shop sales and a lawyer’s paid service are market activities whose final value is recorded in GDP.
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.
