By how much does GDP change between 2004 and 2005 in the following scenario? In 2004,a rich woman has a butler and pays him $50,000 to perform butler services.In 2005,she marries the butler but he continues to perform butler services.
A)GDP rises by $50,000.
B)GDP is unchanged.
C)GDP falls by $50,000.
D)GDP rises by $25,000.
E)Not enough information is given.

Question

Quizplus · Accepted Answer

When the butler is paid as an employee in 2004, his salary contributes to GDP. In 2005, as a spouse, his services are not counted in GDP, so GDP falls by $50,000.

By How Much Does GDP Change Between 2004 and 2005