Why are unpaid household services generally not included in GDP?
Answer and explanation
Correct answer: Because their market value is generally not recorded
Household members may create real services such as cooking, cleaning, and caring for children, but these activities usually occur without a market transaction or observable monetary price. National accounts therefore generally exclude them because reliable valuation is difficult. This is also one reason GDP is not a complete welfare measure.
Frequently asked questions
What is the correct answer to this question?
Because their market value is generally not recorded
Why is this the correct answer?
Household members may create real services such as cooking, cleaning, and caring for children, but these activities usually occur without a market transaction or observable monetary price. National accounts therefore generally exclude them because reliable valuation is difficult. This is also one reason GDP is not a complete welfare measure.
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.
