Scenario: Mike's housekeeper charges $30 for mowing his lawn.
-Refer to the scenario above.Which of the following will happen if Mike starts charging $30 to mow lawns that were previously mowed by their owners?
A) GDP will increase.
B) GDP will decrease.
C) Income per capita will remain unchanged.
D) Income per capita will decrease.

Question

Quizplus · Accepted Answer

When Mike starts charging for a service that was previously not charged for, it becomes part of the formal economy and is counted in the GDP, leading to an increase in GDP.

Scenario: Mike's Housekeeper Charges $30 for Mowing His Lawn