Assertion (A): GDP understates welfare in economies where much exchange takes place without money.
Reason (R): Non-monetary exchanges, such as barter in villages, are not recorded in GDP.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Goods and services exchanged without money add to welfare but not to measured GDP.
R explains A.

Concept: Non-monetary exchanges
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsGDP and welfare

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Assertion (A): GDP understates welfare in economies where much exchange takes place without money.Reason (R): Non-monetary exchanges, such as barter in villages, are not recorded in GDP.

Explanation

Assertion (A): GDP understates welfare in economies where much exchange takes place without money.
Reason (R): Non-monetary exchanges, such as barter in villages, are not recorded in GDP.