Question

The rise of fast-food restaurants, such as McDonald's, made it easier for families to go out to eat rather than preparing their food at home. All other things being equal, the shift of food preparation from the home to the fast-food restaurant would have the effect of:

Answer 1

Answer:

These are the options for the question:

a. lowering GDP

b. raising GDP

c. leaving GDP unchanged

And this is the correct answer:

b. raising GDP

Explanation:

Going out to eat at a fast food restaurant such as McDonald's is usually (not always) more expensive that buying groceries, and preparing meals at home. This means that eating out increases spending, raising GDP.

Eating out also increases spending on gasoline, tips to waiting staff, and even on merchandise, because it is frequent that parents buy toys to kids while eating out. All this actions contribute even more to increasing GDP.