If a larger fraction of the adult population is working in the marketplace, household production
A) counted in real GDP increases.
B) not counted in real GDP increases.
C) counted in real GDP decreases.
D) not counted in real GDP decreases.

Question

Quizplus · Accepted Answer

When a larger fraction of the adult population works in the marketplace, activities traditionally done within the household (such as childcare, cooking, and cleaning) may decrease as these tasks are outsourced to the market. These household activities are not counted in real GDP, so as they decrease, the portion of production not counted in real GDP decreases as well.

If a Larger Fraction of the Adult Population Is Working