By the 1960s, a larger percentage of women were entering the labor force. Becaus
ID: 1227279 • Letter: B
Question
By the 1960s, a larger percentage of women were entering the labor force. Because more women were working, their production of services within the home, such as cooking and cleaning, may have fallen. In addition, they may have employed others to do some tasks that they had previously done themselves, including caring for their children.
a) How did these changes affect GDP as measured by the BEA (U.S. Bureau of Economic Analysis)?
b) If we define "actual GDP" as GDP measured with the inclusion of such things as household production, illegal goods and services, and other typically excluded variables, how would actual GDP have changed?
Explanation / Answer
a. GDP as measured by the BEA (U.S. Bureau of Economic Analysis) would increase because of these changes as BEA will meassuring GDP doesn't include the household production, hence womens who were engaged in household work, there contribution wasn't included in the GDP but now since Womens have started entering the labor force , the GDP increases as now output of there work would be included in the GDP.
b. IF we would have already include the household production in the GDP then there would n't havebeen any change in the GDP as the Women who were joining labor force were engaged in household production and if household production were already been included in the GDP then , there would be no additional contributon by these womens as they were already contributing to the GDP.
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