Which of the following is excluded from GDP but can increase economic welfare?
Answer and explanation
Correct answer: Unpaid elderly care by volunteers
GDP mainly measures market-valued final goods and services. Unpaid voluntary elderly care creates real benefits and can improve welfare, but because no market payment is made, it is generally not recorded in conventional GDP. Option D is correct. A new car sale and paid teaching are market transactions, while government hospital services are generally included through the cost or value of public production.
Frequently asked questions
What is the correct answer to this question?
Unpaid elderly care by volunteers
Why is this the correct answer?
GDP mainly measures market-valued final goods and services. Unpaid voluntary elderly care creates real benefits and can improve welfare, but because no market payment is made, it is generally not recorded in conventional GDP. Option D is correct. A new car sale and paid teaching are market transactions, while government hospital services are generally included through the cost or value of public 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.
