If the underground economy is sizable, then GDP will
A) understate the economy's performance.
B) overstate the economy's performance.
C) fluctuate unpredictably.
D) accurately reflect this subterranean activity.

Question

Quizplus · Accepted Answer

The underground economy consists of economic activities that are hidden from the government and not included in official GDP calculations. Therefore, if the underground economy is large, GDP will not accurately reflect the economy's performance and will understate the true size of the economy.

If the Underground Economy Is Sizable, Then GDP Will