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If Country a Had a Smaller Underground Economy Than Country

Question 126

Multiple Choice

If country A had a smaller underground economy than country B, and country A's citizens worked more hours per week than the citizens of country B, other things equal, then


A) ​GDP comparisons between the countries would overstate the economic welfare of country A compared to B.
B) ​GDP comparisons between the countries would understate the economic welfare of country A compared to B.
C) ​it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries.
D) ​it would not introduce any bias in using GDP to compare economic welfare between the countries.

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