Question

​Scenario: Sarah takes care of her son instead of sending him to a day care that charges​ $12,000 annually. Which of the following will happen if she puts him into a day​ care? A. The​ country's GDP will remain unchanged. B. The​ country's GDP will increase by​ $12,000. C. The​ country's GDP will decrease by​ $12,000. D. The​ country's trade deficit will increase by​ $12,000.

Answer 1

Option B. The country's GDP will increase by $12,000

Step-by-step explanation:

This can be explained by using the following formula:

GDP = Consumption + Investment + Government Spending + (Exports - Imports)

This means that if the consumption of consumers is increased then the Gross Domestic Product will increase. In this case, the increase in the consumer spending by $12,000 would increase the GDP by the same amount. So the option B is correct here.