In Nations That Have Large Underground,or Illegal,sectors

question 73

Multiple Choice

In nations that have large underground,or illegal,sectors:

• A) GDP will overestimate total production in the economy.
• B) GDP will underestimate total production in the economy.
• C) GDP will provide an accurate account of production in the economy.
• D) poverty will be significantly greater than in countries with fewer illegal market activities.

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Definitions:

Investing Activities

Investing activities are financial transactions related to the acquisition or disposal of long-term assets and other investments not considered cash equivalents, as detailed in the statement of cash flows.

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of the company, as reported in the statement of cash flows.

Accounts Payable

A company's financial liability to its suppliers or creditors for received goods and services.

Accounts Receivable

Accounts Receivable are amounts owed to a business by its customers from sales or services provided on credit.