Why is the unpaid service of parents teaching their children at home generally not included in GDP?
Answer and explanation
Correct answer: Because it generally has no market transaction or observable monetary value
GDP mainly records production that is exchanged in markets or can be assigned a reliable monetary value. When parents teach their own children without payment, no market transaction takes place and no income or expenditure is recorded for that service. The activity is valuable, but it is generally outside measured GDP because its value is difficult to observe consistently.
Frequently asked questions
What is the correct answer to this question?
Because it generally has no market transaction or observable monetary value
Why is this the correct answer?
GDP mainly records production that is exchanged in markets or can be assigned a reliable monetary value. When parents teach their own children without payment, no market transaction takes place and no income or expenditure is recorded for that service. The activity is valuable, but it is generally outside measured GDP because its value is difficult to observe consistently.
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.
