Which of the following changes causes reported GDP to increase when, in fact, total production is unchanged?

Question

Quizplus · Accepted Answer

A shift from household production to market production will increase reported GDP, even if there is no change in total production. This is because household production is not officially counted in GDP, while market production is. Legalizing previously illegal activities, such as drug trade or prostitution, will also increase reported GDP, even if there is no change in total production. This is because previously illegal activities were not officially counted in GDP, but are now included. Therefore, both options A and B are correct.

Which of the Following Changes Causes Reported GDP to Increase