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funkiiee funkiiee
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A month ago
Billy is a plumber. He earns $15 per hour. One morning, just before leaving for work, he found a leaky pipe in his kitchen. He spent 2 hours repairing the pipe.
a) How would this affect the calculation of GDP?
b) If Billy had spent 2 hours working for one of his clients, what would have been the effect of his activity on the calculation of GDP?
Textbook 

Macroeconomics


Edition: 3rd
Authors:
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chanelstar27chanelstar27
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A month ago
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More solutions for this book are available here
a) Billy would not receive any monetary payment for the 2 hours he spent on repairing the pipe in his kitchen. This is an example of home production. As a result, his activity would not affect the calculation of GDP.
b) If Billy had spent 2 hours working for his clients, GDP would have increased by $15 × 2 = $30.

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funkiiee Author
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A month ago
Helped a lot
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
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2 hours ago
Smart ... Thanks!
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