Elly is a teacher. Her mom gets really sick in january 2009, therefore she quits

Question

Elly is a teacher. Her mom gets really sick in january 2009, therefore she quits her job as a teacher and cares for het mother full time. However in january 2010 the government introduces a new scheme under which elly can get full time care for her mother. A full time carer is appointed at a salary of 30.000 per year of which elly pays 10.000 with the balance paid by elly's local authority. elly returns to het local teaching job for a salary of 40.000 per year. How much do these transactions contribute to GDP in 2010?

Explanation / Answer

GDP is the market value of all final goods and services produced in a nations economy in a given year

In 2010. GDP for full time career = $30,000

GDP for full time job = $40,000

Total GDG contribution = $70,000

The $10,000 is an intermediate expense that does not get added or subtracted from GDP total.

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