GDP may inaccurately measure the value of aggregate output because it may not properly account for
A) production in the underground economy and the true value of government production.
B) the true value of government production and the proper value of purchases and sales of used goods.
C) the proper value of purchases and sales of used goods and depreciation of consumer durables.
D) the depreciation of consumer durables and production in the underground economy.
E) all services produced.

Question

Quizplus · Accepted Answer

GDP does not include production in the underground economy, such as illegal activities or unreported income. Additionally, it may not accurately measure the true value of government production, such as the value of public goods and services like national defense or public schools. These factors can lead to an inaccurate measurement of the true value of aggregate output.

GDP May Inaccurately Measure the Value of Aggregate Output Because