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National Income Accounting — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsNational Income Accounting3 Marks
Question
Explain how 'non-monetary exchanges' are a limitation in taking gross domestic product as an index of welfare.
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Answer

Non-monetary exchanges refer mainly to the own account or self-consumed goods and services like services of family members to each other, which are left out of GDP on account of non-availability of data. But these do contribute to welfare. As such GDP under estimates welfare.

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