Which of the Following Actions Will Lead to GDP Underestimating

question 88

Multiple Choice

Which of the following actions will lead to GDP underestimating the true output of the economy?

• A)Gretchen begins an accounting and bookkeeping service in her home, accepting cash as payment, which is not reported to tax authorities.
• B)David accepts a position as an economist with the Bank of Canada.
• C)James begins drawing Canada Pension Plan benefits upon his retirement.
• D)Mary begins a catering business.

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Definitions:

Functional Fixedness

A cognitive bias that limits a person to use an object only in the way it is traditionally used, ignoring other possible uses.

Noncompensatory Modeling

A decision-making process where options are evaluated based on whether they meet predetermined criteria, without considering trade-offs between characteristics.

Insight

A sudden understanding or realization of a problem's solution, often coming unexpectedly after a period of contemplation or seeming like a spontaneous revelation.

Mental Set

A psychological tendency or mindset to approach problems in a specific way due to past experiences or habits.