Question

People have begun making face masks in their homes to protect their families against Coronavirus. Additionally, they are making masks to give to people in the medical field who do not have them. What impact will this production of masks have on GDP?

	a.	It will have a negative impact on GDP because people aren't buying masks from China.
	b.	It will increase GDP because there is an increase in production.
	c.	It will have a positive impact on GDP because consumption is rising.
	d.	There will be no impact on GDP.

Answer 1

Answer

Option d

There will be no impact on GDP

the masks are not sold or used by paying for it so the masks will not have any impact on the GDP

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(Note: this is an indirect effect and given question does not follow it)

But, for the indirect effect, that the inputs may be purchased by some of the people to make the masks so the GDP will increase but less than the consumption of the masks

In this case, the option b is correct