The measurement of GDP includes
A)nonmarket goods such as homemaking and child-rearing.
B)the benefits of clean air and water.
C)estimated values of activity in the underground economy.
D)purchases and sales of goods produced in previous periods.

Question

Quizplus · Accepted Answer

GDP includes estimated values of activity in the underground economy, also known as the shadow or informal economy. This includes economic activities such as illegal drug sales, unreported income, and cash transactions that are not formally recorded in official statistics. However, GDP does not include nonmarket goods such as homemaking and child-rearing (which are not part of the formal market economy), the benefits of clean air and water (which are not considered goods), or purchases and sales of goods produced in previous periods (which are not current economic production).

The Measurement of GDP Includes