One of the flaws of GDP is that it
A) includes only transactions that take place in formal businesses.
B) ignores transactions that do not take place in organized markets.
C) includes measures of the underground economy.
D) includes measures of changes of life associated with producing output.

Question

Quizplus · Accepted Answer

GDP does not take into account transactions that occur outside of formal markets, such as household production or black market transactions. This means that the true level of economic activity may be higher or lower than GDP suggests.

One of the Flaws of GDP Is That It