Why is the wage paid to a domestic worker included in GDP?
Answer and explanation
Correct answer: Because it is a paid productive service
GDP measures the market value of final goods and services produced within a country during a period. A domestic worker supplies a service for which the household makes a market payment, so that service has measurable economic value and is included. It is not foreign aid, a capital gain, or a transfer payment. Unpaid household work is generally excluded because it has no recorded market transaction.
Frequently asked questions
What is the correct answer to this question?
Because it is a paid productive service
Why is this the correct answer?
GDP measures the market value of final goods and services produced within a country during a period. A domestic worker supplies a service for which the household makes a market payment, so that service has measurable economic value and is included. It is not foreign aid, a capital gain, or a transfer payment. Unpaid household work is generally excluded because it has no recorded market transaction.
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.
