Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It shows that GDP accurately reflects all forms of economic production since household services are not included in GDP calculations.
B
It highlights that GDP fails to account for non-monetary contributions to the economy, which can underestimate overall economic welfare.
C
It indicates that only paid work contributes to GDP, making unpaid work irrelevant to economic analysis.
D
It suggests that GDP is a comprehensive measure that includes all forms of work, paid or unpaid.
Understanding the Answer
Let's break down why this is correct
Answer
Maria's unpaid childcare work shows one of the main limitations of Gross Domestic Product (GDP) as a measure of economic activity. GDP only counts money that is spent on goods and services, so it does not include valuable activities like Maria's unpaid caregiving. This means that even though she is providing an important service that helps her neighbors, it does not get recognized in the economic data. For example, if Maria were to charge for her childcare, that money would contribute to GDP, but her generous volunteer work does not, even though it adds significant value to her community. Therefore, GDP misses out on measuring the true contributions people make when they help each other without payment.
Detailed Explanation
Maria's work is valuable, but it doesn't get counted in GDP. Other options are incorrect because This answer thinks GDP includes everything, but it doesn't count unpaid work; This answer suggests only paid work matters, which isn't true.
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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