Compared to high-income developed countries, the per person income levels of poorer less developed countries are somewhat understated because

Question

Quizplus · Accepted Answer

The GDP figures omit the production within the household sector, which is generally larger in the poorer countries. In less developed countries, a significant portion of economic activity takes place within households and small businesses, which are not included in the formal GDP calculations. Therefore, the per capita income levels of these countries may be understated compared to high-income developed countries where household production is relatively smaller.

Compared to High-Income Developed Countries, the Per Person Income Levels