Which activity may raise GDP because its market value is recorded?
Answer and explanation
Correct answer: Providing food service for payment
GDP records the market value of final goods and services produced during a period. A food service supplied for payment is a market transaction, so its recorded value can be included in GDP, subject to national accounting rules. Unpaid household cooking, free teaching and family care may be valuable, but their non-market production is generally not recorded in GDP. Thus, option C is correct.
Frequently asked questions
What is the correct answer to this question?
Providing food service for payment
Why is this the correct answer?
GDP records the market value of final goods and services produced during a period. A food service supplied for payment is a market transaction, so its recorded value can be included in GDP, subject to national accounting rules. Unpaid household cooking, free teaching and family care may be valuable, but their non-market production is generally not recorded in GDP. Thus, option C 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.
