Joao used to volunteer to cut his elderly neighbour's grass, but now his neighbour pays a company to do it. How does this change affect GDP?

Question

Quizplus · Accepted Answer

When the neighbor starts paying a company to cut the grass instead of having it done for free by Joao, this transaction now becomes part of the market economy and is counted in GDP, increasing it by the price of the service.

Joao Used to Volunteer to Cut His Elderly Neighbour's Grass