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.

Question

Quizplus · Accepted Answer

GDP only measures legal economic activities that are recorded and reported to the government. Thus, in nations with large illegal sectors, GDP will not take into account the value of such activities, which means that it might underestimate total production in the economy.

In Nations That Have Large Underground,or Illegal,sectors