GDP excludes most nonmarket transactions.Therefore, GDP tends to
A)underestimate the rate of inflation in the economy.
B)overestimate the rate of inflation in the economy.
C)overestimate the amount of production of the economy.
D)underestimate the amount of production in the economy.

Question

Quizplus · Accepted Answer

GDP excludes nonmarket transactions such as household labor and volunteer work, which means it does not account for all economic production, leading to an underestimation of the total production in the economy.

GDP Excludes Most Nonmarket Transactions.Therefore, GDP Tends to