Which of the Following Is Likely to Increase Measured GDP

question 155

Multiple Choice

Which of the following is likely to increase measured GDP?

• A)A greater number of women decide to stay at home and provide day care for their children under age 5.
• B)Marijuana becomes legal to grow and sell.
• C)Tax rates increase and more people attempt to underreport their income for tax purposes.
• D)More people decide to do their own lawn maintenance and give up using a professional service.

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Definitions:

Unit Elastic

A situation where a percentage change in the price of a good results in an equal percentage change in the quantity demanded.

Inelastic

Describes a situation where the demand or supply for a good or service is not significantly altered when the price changes.

Elastic

Elastic describes a situation in economics where the quantity demanded or supplied changes significantly in response to price changes.

Price Elasticity

The extent to which changes in price affect the demand for a specific good.