A city experiences a rise in economic growth due to improvements in technology, but at the same time, there is increasing consumption of illegal drugs. What shortcoming of GDP measurement does this finding reflect?

Question

Quizplus · Accepted Answer

The increasing consumption of illegal drugs represents economic activity that is part of the shadow economy, which is not accounted for in standard GDP measurement. This reflects a shortcoming of GDP measurement in not capturing all economic activity within a given economy.

A City Experiences a Rise in Economic Growth Due to Improvements