Registered Environmental Manager (REM) Practice Exam

Which of the following contributes positively to a nation's wealth but is excluded from GDP?

1. Housing services

2. Voluntary work

3. Corporate profits

4. Government expenditures

The correct answer is: Voluntary work

Voluntary work plays a crucial role in contributing to the overall well-being and wealth of a nation, even though it is not included in the Gross Domestic Product (GDP) calculations. GDP measures only market transactions and excludes non-market activities, such as unpaid labor or voluntary work. Although voluntary work significantly enhances community services and supports various sectors such as healthcare, education, and social services, its value is not accounted for in GDP because it does not involve a monetary exchange. By providing important services that would otherwise need to be compensated, voluntary work enhances social capital and can lead to economic benefits in the longer term, such as reduced healthcare costs and improved workforce productivity. Therefore, while it adds substantial value to society, it is omitted from conventional economic measurements, which focus solely on financial transactions. This creates a gap in understanding the full scope of a nation's wealth and contributions beyond monetary metrics.