Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
GDP includes informal sales
B
GDP does not account for unpaid household work
C
GDP accurately reflects all economic activities
D
GDP measures only government spending
Understanding the Answer
Let's break down why this is correct
Answer
Gross Domestic Product, or GDP, measures the total value of all goods and services produced in a country, but it has a limitation when it comes to household production. Household production includes activities like cooking, cleaning, and childcare, which people do at home without payment. Since GDP only counts paid work, it misses the economic value of these important activities that help families and communities thrive. For example, if a parent stays home to care for their children instead of working for a salary, that valuable work doesn't show up in GDP, even though it significantly contributes to society. This means GDP can give an incomplete picture of the overall economy by overlooking the contributions made at home.
Detailed Explanation
GDP does not include unpaid work done at home, like cooking or cleaning. Other options are incorrect because Some might think GDP includes all sales, even informal ones; It's a common belief that GDP shows everything about the economy.
Key Concepts
household production
Topic
GDP Limitations and Household Production
Difficulty
easy level question
Cognitive Level
understand
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