Scenario: Sarah takes care of her son instead of sending him to a day care that charges $12,000 annually.
-Refer to the scenario above.Sarah's husband earns a salary of $70,000 per year.Which of the following will happen if her husband,instead of Sarah,quits his job to look after their son?
A) The country's GDP will decrease by $58,000.
B) The country's GDP will decrease by $70,000.
C) The country's trade surplus will increase.
D) The country's trade deficit will increase.

Question

Quizplus · Accepted Answer

If Sarah's husband quits his job, the household income will decrease by $70,000. This will lead to a decrease in consumption spending, which is a major component of GDP. Therefore, the country's GDP will decrease by $70,000. Choices A, C, and D are not relevant to this scenario.

Scenario: Sarah Takes Care of Her Son Instead of Sending