A shortcoming of real GDP is it:
A) does not include the underground economy.
B) includes non-market goods.
C) does not measure changes in employment.
D) does not include the value obtained through purchases of stocks and bonds.
E) does not account for changes in the prices of goods and services.

Question

Quizplus · Accepted Answer

Real GDP does not include the underground economy, which consists of illegal activities such as drug trafficking and prostitution, as well as legal transactions that are not reported to the government for tax purposes. This can lead to an underestimation of the actual size of the economy and its contribution to economic growth.

A Shortcoming of Real GDP Is It