What is measured by the underground economy?
Explanation
This question clarifies the definition of the 'underground economy,' another reason why official GDP figures understate the total output of an economy.
Other questions
What is the primary measure of an economy's performance, representing its annual total output of goods and services?
Why are secondhand sales excluded from the calculation of Gross Domestic Product (GDP)?
According to the 2007 data for the U.S. economy, if personal consumption expenditures were dollar 9734 billion, gross private domestic investment was dollar 2125 billion, government purchases were dollar 2690 billion, and net exports were negative dollar 708 billion, what was the Gross Domestic Product (GDP)?
In the context of national income accounting, what does 'value added' represent?
Using the income approach data for 2007, what was the U.S. National Income if compensation of employees was dollar 7874 billion, rents were dollar 65 billion, interest was dollar 603 billion, proprietors' income was dollar 1043 billion, corporate profits were dollar 1627 billion, and taxes on production and imports were dollar 1009 billion?
Which adjustment must be made to Gross Domestic Product (GDP) to determine Net Domestic Product (NDP)?
What is the key difference between nominal GDP and real GDP?
Which of the following is identified as a shortcoming of using Gross Domestic Product (GDP) as a measure of total output and well-being?
What is the term for goods and services, such as machinery and tools, that are purchased for resale or for further processing or manufacturing?
In the expenditures approach to GDP, what does the component 'Gross Private Domestic Investment' (Ig) include?
What is the relationship between Gross Investment (Ig) and Net Investment (In)?
Which of the following is an example of a public transfer payment excluded from GDP?
What is the largest share of national income in the U.S. economy, according to the 2007 data provided?
In the value-added method of calculating GDP, what is the value added by a firm?
How do national income accountants define 'Net Exports' (Xn)?
To move from National Income (NI) to Personal Income (PI), which of the following adjustments is necessary?
What is the formula for calculating a price index for a given year?
If a pizza-only economy produces 7 pizzas in year 2 at a price of dollar 20 each, and the price index for year 2 is 200 (with year 1 as the base year where the price was dollar 10), what is the real GDP for year 2?
What does Disposable Income (DI) represent?
Why does GDP understate a nation's total output?
If nominal GDP in a given year is dollar 5803.1 billion and the GDP price index is 81.6, what is the real GDP?
The income approach to GDP sums which of the following components before making adjustments for net foreign factor income and depreciation?
If an economy's inventories decrease by dollar 10 billion during a year, how is this treated in the calculation of Gross Private Domestic Investment (Ig)?
Corporate profits are subdivided into which three categories by national income accountants?
If National Income is dollar 12,221 billion, what other adjustments are needed to arrive at Gross Domestic Product (GDP) of dollar 13,841 billion, based on the 2007 data?
In a hypothetical five-stage production process for a suit, Firm A (sheep ranch) sells wool for dollar 120. The total value added for the entire process is dollar 350. What does this dollar 350 represent?
Which of the following is considered a component of Personal Consumption Expenditures (C) in GDP accounting?
If real GDP in a country was dollar 9817.0 billion in 2000 and dollar 11,566.8 billion in 2007, what does this change represent?
Which of the following would be added to National Income (NI) to derive Personal Income (PI)?
If an economy is 'disinvesting,' what does this imply about its capital stock?
What are the two major approaches used to measure GDP?
Why must net foreign factor income be subtracted from U.S. national income (NI) to determine the value of U.S. domestic output (GDP)?
If Personal Income (PI) is dollar 11,659 billion and personal taxes are dollar 1482 billion, what is the Disposable Income (DI)?
What is the primary reason the 'underground economy' exists?
The national income accounting system does for the economy as a whole what private accounting does for which of the following?
If Net Domestic Product (NDP) is dollar 12,154 billion and there is a statistical discrepancy of dollar 29 billion and net foreign factor income of dollar 96 billion, what is National Income (NI)?
What is the main reason that the GDP price index used in the United States is referred to as the 'chain-type annual-weights price index'?
Which component of GDP is most likely to be negative?
If National Income (NI) is dollar 12,221 billion, taxes on production and imports are dollar 1009 billion, Social Security contributions are dollar 979 billion, corporate income taxes are dollar 467 billion, undistributed corporate profits are dollar 344 billion, and transfer payments are dollar 2237 billion, what is Personal Income (PI)?
What is the definition of a final good in the context of GDP?
The circular flow diagram illustrates that the expenditures on goods and services are allocated as income to whom?
If a pizza-only economy's nominal GDP is dollar 200 and its real GDP is dollar 80, what is the price index?
One of the shortcomings of GDP is its failure to account for improved product quality. Which of the following is an example of this limitation?
The 'consumption of fixed capital' is another name for what economic concept?
Which of the following is NOT a component of the income approach to GDP?
What does a price index of 69.7 for the year 1985 (with a base year of 2000) indicate?
The sale of a home built 20 years ago would be excluded from this year's GDP because it is considered what kind of transaction?
How are government purchases (G) different from government transfer payments?
Which of these transactions would be included in the investment component (Ig) of GDP?