Which limitation appears when GDP excludes the value of free online knowledge content?
Answer and explanation
Correct answer: Consumer utility and knowledge benefits may be understated in measured output
GDP records production through market valuation, and a service with a zero posted price may have no directly observed sales value even when users receive substantial benefits. Free educational videos, articles or open-source knowledge can create utility, learning and productivity gains that are larger than the amount recorded in national accounts. This is a measurement limitation, not proof that GDP overstates all digital benefits. Hence C is correct; A, B and D make unjustified universal claims.
Frequently asked questions
What is the correct answer to this question?
Consumer utility and knowledge benefits may be understated in measured output
Why is this the correct answer?
GDP records production through market valuation, and a service with a zero posted price may have no directly observed sales value even when users receive substantial benefits. Free educational videos, articles or open-source knowledge can create utility, learning and productivity gains that are larger than the amount recorded in national accounts. This is a measurement limitation, not proof that GDP overstates all digital benefits. Hence C is correct; A, B and D make unjustified universal claims.
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.
