Why is the unpaid service of a family member doing household work generally not added to GDP?
Answer and explanation
Correct answer: Because no market transaction is recorded
GDP is mainly based on market-valued production recorded through economic transactions. An unpaid household service may be useful and economically important, but it normally has no observed market price or recorded sale, so national accounts generally exclude it. Therefore option B is correct. It is not excluded because it is useless, rural, or imported; those statements confuse the accounting criterion.
Frequently asked questions
What is the correct answer to this question?
Because no market transaction is recorded
Why is this the correct answer?
GDP is mainly based on market-valued production recorded through economic transactions. An unpaid household service may be useful and economically important, but it normally has no observed market price or recorded sale, so national accounts generally exclude it. Therefore option B is correct. It is not excluded because it is useless, rural, or imported; those statements confuse the accounting criterion.
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.
