Which of the following is a benefit of production that may not be fully measured in GDP?
Answer and explanation
Correct answer: Spread of knowledge in society
GDP is mainly based on recorded market transactions and the value of final goods and services. Knowledge created by production can spread to other people and firms, improving their productivity or understanding without a separate payment. This positive spillover is a benefit whose full value may not appear in market prices or GDP. Therefore option C is correct. Prices, wages, and profits are directly recorded monetary components of production.
Frequently asked questions
What is the correct answer to this question?
Spread of knowledge in society
Why is this the correct answer?
GDP is mainly based on recorded market transactions and the value of final goods and services. Knowledge created by production can spread to other people and firms, improving their productivity or understanding without a separate payment. This positive spillover is a benefit whose full value may not appear in market prices or GDP. Therefore option C is correct. Prices, wages, and profits are directly recorded monetary components of production.
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.
