If illegal activities were included in GDP calculations, the measured level of GDP would be
A) higher.
B) a perfect measure of well-being.
C) unchanged.
D) free from business cycles.
E) lower.

Question

Quizplus · Accepted Answer

Illegal activities such as drug trafficking, prostitution, and smuggling are not currently included in GDP calculations, but if they were included, the measured level of GDP would be higher. This is because the monetary value of illegal activities would be added to the total output of the economy. However, it is important to note that including illegal activities would not necessarily indicate an improvement in overall well-being or quality of life. Additionally, the inclusion of illegal activities in GDP calculations could potentially incentivize or encourage illegal activity, which would have negative consequences.

If Illegal Activities Were Included in GDP Calculations, the Measured