Chapter 6 (6.4)

Question 1

GDP is a perfect measure of production because the government is able to account for all production of goods and services over the course of the year.

true
false

Answer 1

false

Question 2

To be included in GDP, an activity has to involve a market transaction.

true
false

Answer 2

true

Question 3

The consumption of leisure

is always omitted from GDP.

is included in GDP if it involves productive activity.

is omitted from GDP if the activity has no social use.

is always included in GDP.

is included in GDP if it involves a market transaction.

Answer 3

is included in GDP if it involves a market transaction.

Question 4

Which of the following best describes what is meant by the term underground economy?

economic activity associated with the shadier side of the economy
illegal drug activity

economic activity that is not reported to the government

economic activity that is hard to classify

economic activity conducted by the homeless

Answer 4

economic activity that is not reported to the government