Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Households are becoming more self-sufficient and providing more services without monetary exchange.
B
The government is increasing its spending on public services.
C
There is a rise in the number of businesses offering paid services.
D
The country's net exports are increasing dramatically.
Understanding the Answer
Let's break down why this is correct
Answer
When a country sees more household production, like cooking, cleaning, or childcare done at home, it suggests that people are finding ways to meet their needs without relying on paid services. This can improve economic welfare because families may feel more satisfied and connected by spending time together while saving money. For example, if a family decides to cook meals at home instead of eating out, they not only save money but also enjoy healthier food and quality time together. However, GDP does not count this household production because it only measures money spent in the market. Therefore, even if GDP remains the same, the actual well-being of people can improve through these unpaid activities that enhance their quality of life.
Detailed Explanation
When families do more work at home, they save money. Other options are incorrect because Some might think that more government spending means more welfare; People might believe that more businesses mean more welfare.
Key Concepts
GDP Limitations
Household Production
Economic Welfare
Topic
GDP Limitations and Household Production
Difficulty
medium level question
Cognitive Level
understand
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