Assume That the Size of the Underground Economy Increases Both

question 158

Multiple Choice

Assume that the size of the underground economy increases both absolutely and relatively over time. As a result,

• A) real GDP will rise more rapidly than nominal GDP.
• B) GDP will tend to increasingly understate the level of output through time.
• C) GDP will tend to increasingly overstate the level of output through time.
• D) the accuracy of GDP will be unaffected through time.

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Definitions:

Common Law

A legal system based on precedents and judicial decisions rather than statutory laws.

Lessee

An individual or entity who leases an asset from another, the lessor, under the terms of a lease agreement.

Possession and Use

The act of holding property and utilizing it, which may imply certain rights or obligations under the law.

Lease

A contract by which one party conveys land, property, services, or the use of assets to another party for a specified time, usually in return for a periodic payment.