Which of the following actions will lead to GDP underestimating the true output of the economy?
A)Gretchen begins an accounting and bookkeeping service in her home, accepting cash as payment, which is not reported to tax authorities.
B)David accepts a position as an economist with the Bank of Canada.
C)James begins drawing Canada Pension Plan benefits upon his retirement.
D)Mary begins a catering business.

Question

Quizplus · Accepted Answer

Gretchen's unreported cash transactions will not be captured in GDP calculations, leading to an underestimation of the true output of the economy. The other choices do not directly impact GDP calculations.

Which of the Following Actions Will Lead to GDP Underestimating