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One of the flaws of GDP is that it:

A) Includes only transactions that take place informal businesses.

B) Ignores transactions that do not take place in organized markets.

C) Includes measures of the underground economy.

D) Includes measures of changes of life associated with producing output.

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Mahe Alam
Mahe AlamLv10
19 Mar 2021

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Related questions

16) Why is the Human Development Index thought to be a better measure of economic well-being than real GDP per person? A) It includes leisure time and household production. B) It includes a measure of resource depletion. C) It includes health and education measures, as well as real GDP per person. D) It includes only health and education measures, ignoring real GDP per person. E) It ignores health, which is hard to measure.

1. One of the limitations of aggregate accounting is that:

a. there isn't enough data available in most developed countries to have national income accounts.

b. it measures market activity, not social welfare.

c. it includes market transactions that should be excluded. 

d. it doesn't take depreciation into account.

 

2. Payments to the owners of firms are included in aggregate accounting as

a. employee compensation.

b. profits.

c. rents.

d. interest.

 

3. GDP is a good measure of: 

a. relative welfare in various countries.

b. relative living standards in various countries.

c. market activities at market prices.

d. relative prices in various countries.

 

How does the underground economy affect the accuracy of official measures of GDP, unemployment, and productivity, and complicate the tasks of policymakers?

The underground economy


A. makes it more difficult for policymakers to estimate how close the economy is to its natural rate of unemployment.

B. Does not affect the accuracy of official measures of GDP, unemployment, and productivity.

C. Leads to an overestimated threat of inflation and recession.

D. Leads to an overestimated measurement of GDP, unemployment, and productivity.

I think the answer is either C or A. But I am not sure. It could also be C.

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