GDP Understates the Value of Output Produced by an Economy

question 108

Multiple Choice

GDP understates the value of output produced by an economy because it

• A) includes transactions that do not take place in organized markets, such as home-cooked meals.
• B) excludes value added from the underground economy, such as tips taken "under the table."
• C) includes environmental degradation caused by increased output production.
• D) excludes the value of the wages and benefits of government employees.

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