Because of Transactions Which Take Place in the Underground Economy

question 68

Multiple Choice

Because of transactions which take place in the underground economy, the:

• A) GDP calculation tends to overstate the actual value of goods sold in the economy.
• B) value of the GDP calculation through the expenditure approach will be greater than the value calculated through the income approach.
• C) GDP calculation tends to understate the actual value of goods sold in the economy.
• D) value of the GDP calculation will be equal to the value of the national income calculation.

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Definitions:

Overfishing

The unsustainable harvesting of fish species at a rate faster than they can reproduce, leading to declining populations.

Reduce Costs

Strategies or actions taken by businesses to decrease expenses and improve profitability without compromising the quality of their products or services.

Allocation

The process of distributing resources, goods, or services according to a specific plan or system.

Productivity

A measure of average output or real output per unit of input. For example, the productivity of labor is determined by dividing real output by hours of work.