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  2. Business
  3. Economics Study Set 4
  4. Quiz 19: GDP: Measuring Total Production and Income

Gross Domestic Product Understates the Total Production of Final Goods

Question 58
Multiple Choice

Gross domestic product understates the total production of final goods and services because of the omission of A) the underground economy. B) intermediate goods. C) inflation. D) exports.

Related questions
Q 59
The size of the underground economy would tend to decrease if the government of a country A) decreased government regulations on businesses. B) made over-the-counter drugs illegal. C) increased income tax rates. D) increased business taxes.
Q 60
The size of the underground economy would tend to increase if the government of a country A) decreased government regulations on businesses. B) increased income tax rates. C) legalized prostitution. D) legalized marijuana.
Q 61
Suppose Bob works for Mary as a proofreader.Mary and Bob fall deeply in love,marry and have eight children.Bob stops working for Mary in order to care for the children.What will be the effect on GDP? A) GDP will decrease. B) GDP will increase. C) GDP will not change. D) GDP may increase or may decrease depending on inflation.
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