A shortcoming of real GDP is:
A) it does not include the underground economy.
B) it includes non-market goods.
C) it does not measure changes in employment.
D) it does not include the value obtained through purchases of stocks and bonds.
E) it does not account for changes in the prices of goods and services.

Question

Quizplus · Accepted Answer

Real GDP does not include the underground economy which consists of illegal activities such as black market transactions, prostitution, drug sales, etc. These activities are not recorded and therefore not included in the calculation of GDP, leading to a potential underestimation of the true economic activity in a country.

A Shortcoming of Real GDP Is