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    The discount rate

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    What would happen to GDP if a significant number of house-spouses who were previously stay home to care for their children began taking jobs and placing their children in day care? Would the nation's "well being" necessarily be better off?

    Is the following statement true or false: "The 'Discount Rate' used by the Fed is the prime rate financial institutions will use when making "home loans". Why?

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    Solution Preview

    1. The services provided by housewives to take care of their children is not included in GDP as it is a private transaction. However, the services provided by the day care centers is included in the GDP as they are paid for the services ...

    Solution Summary

    The discount rate is emphasized for macroeconomics of individual decisions are determined. The house-spouses who were previously stay at home are analyzed.