CBSE 2017 Class 12 Economics Delhi Set-1

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Question : 15
Total: 18
Explain 'non-monetary exchanges' as a limitation of using gross domestic product as an index of welfare of a country.
Solution:  
Many activities in an economy are not evaluated in monetary terms, for e.g. Non-market transactions like services of house wife, kitchen gardening, etc. are not included in GDP due to non-availability of data. It is difficult to ascertain their market value as they are not rendered for the purpose of earning income. Though these services are rendered for the development of a child and welfare of the family, it is not included in the gross national product. Thus, non-monetary exchanges is a limitation of using gross domestic product as an index of welfare of a country.
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