Which of the following statements best describes the limitations of GDP as an economic indicator when considering the informal economy and unpaid work in household production?

GDP, or Gross Domestic Product, measures the total value of goods and services produced in a country, but it has important limitations. One major limitation is that it does not account for the informal economy, which includes jobs and services that are not officially recorded, like street vendors or babysitters who are paid cash. Additionally, GDP ignores unpaid work in households, such as cooking, cleaning, and caring for children, which are essential for the well-being of families and society. For example, if a parent stays home to care for their children instead of working in a paid job, their valuable contributions are not reflected in GDP figures. This means that GDP can give a distorted picture of a country’s economic health and the true value of all work being done.