Question

Aaron and Adam, who are both full-time students, have each been doing work on their own cars . Then Adam decides to hire Aaron to do his oil changes, and in turn. Aaron hires Adam to keep his car clean. As a result of this change , GDP

( 3) Aaron and Adam, who are both full-time students, have each been doing work on their own cars. Then Adam decides to hire Aaron to do his oil changes, and in turn, Aaron hires Adam to keep his car clean. As a result of this change, GDP (2.05) Arises. B falls. C is unaffected because the same work is being done as before. Dis unaffected because Adam and Aaron are full-time students.

Answer 1

2). Earlier Aaron and John performed services for their own consumption and services produced for self consumption are not included in GDP. But now John performs the service for Aaron and Aaron performs the service for John. Here in this case services are produced not for self consumption and hence should be included in GDP. Inclusion of these newly produced services will increase GDP.

So correct answer is option (A).