Why is a free teaching service provided by a volunteer not included in GDP?
Answer and explanation
Correct answer: Because it is an unpaid non-market service
GDP measures the market value of currently produced final goods and services, normally using observed market transactions or reliable imputed prices. A volunteer's free teaching is not sold in the market and no payment is made for it, so its value is generally not recorded in national income accounts. This exclusion does not mean the service has no social value; it only reflects the measurement boundary of GDP.
Frequently asked questions
What is the correct answer to this question?
Because it is an unpaid non-market service
Why is this the correct answer?
GDP measures the market value of currently produced final goods and services, normally using observed market transactions or reliable imputed prices. A volunteer's free teaching is not sold in the market and no payment is made for it, so its value is generally not recorded in national income accounts. This exclusion does not mean the service has no social value; it only reflects the measurement boundary of GDP.
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.
