Question

Part 1(1 pt)

In many parts of the world, a significant amount of effort goes into nonmarket production in the household, such as stay-at-home parenting. For example, Zimbabwe has a very high rate of nonmarket household production, about 35% of GDP. In contrast, Canada has a low rate of nonmarket household production, about 12% of GDP.
How does the difference in nonmarket household production affect a comparison of GDP between Zimbabwe and Canada?
Choose one or more:A.Zimbabwe’s GDP would be lower if nonmarket production were counted.B.Zimbabwe’s GDP would be higher if nonmarket production were counted.C.Canada’s GDP would be lower if nonmarket production were counted.D.Canada’s GDP would be higher if nonmarket production were counted.
Part 2(1 pt)
Suppose that the amount of nonmarket production is the same in both countries but that Canadians have far more leisure time than Zimbabweans. How would this difference in leisure time affect a comparison of GDP between Zimbabwe and Canada?
Choose one or more:A.Canada’s GDP would be higher if leisure time were counted.B.Zimbabwe’s GDP would be higher if leisure time were counted.C.The difference between Canada’s and Zimbabwe’s GDP would be smaller if leisure time were counted.D.Zimbabwe’s GDP would be lower if leisure time were counted.E.Canada’s GDP would be lower if leisure time were counted.F.The difference between Canada’s and Zimbabwe’s GDP would be larger if leisure time were counted.

Answer 1

The difference in nonmarket household production affects Zimbabwe's GDP positively, while leisure time affects Canada's GDP positively.

Step-by-step explanation:

The difference in nonmarket household production between Zimbabwe and Canada would affect the comparison of GDP between the two countries in the following way: Zimbabwe’s GDP would be higher if nonmarket production were counted. This is because nonmarket production, such as stay-at-home parenting, contributes significantly to Zimbabwe's GDP. On the other hand, Canada has a lower rate of nonmarket household production, so counting it would not have a significant impact on Canada's GDP.

If the amount of nonmarket production is the same in both countries, but Canadians have more leisure time than Zimbabweans, it would affect the GDP comparison in the following way: Canada’s GDP would be higher if leisure time were counted. Leisure time is not included in GDP calculations, so if it were included, it would increase Canada's GDP. Conversely, counting leisure time would not have a significant impact on Zimbabwe's GDP.