Unpaid household services, such as cooking performed by a family member, are generally excluded from GDP because they
Correct answer: A. Do not involve market transactions with measured prices
- A. Do not involve market transactions with measured prices
- B. Always use imported inputs
- C. Reduce the country's capital stock
- D. Are counted as government consumption
Explanation
GDP records market production or production assigned a measurable market value. Unpaid household services may provide economic welfare, but they normally do not enter national income accounts because no market transaction is recorded.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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