QUESTION 18 If country A had a smaller underground economy than country B, and country A's citizens worked more hours per week than the citizens of country B, other things equal, then a. it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries. b. it would not introduce any bias in using GDP to compare economic welfare between the countries. GDP comparisons between the countries would overstate the economic welfare of country A compared to B. GDP comparisons between the countries would understate the economic welfare of country A compared to Od.B.

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Chapter19: The Macroeconomic Perspective
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QUESTION 18
If country A had a smaller underground economy than country B, and country A's citizens worked more hours per
week than the citizens of country B, other things equal, then
it is impossible to know which direction GDP comparisons between the countries would be biased as
measures of the economic welfare of the two countries.
b. it would not introduce any bias in using GDP to compare economic welfare between the countries.
GDP comparisons between the countries would understate the economic welfare of country A compared to
Od.B.
GDP comparisons between the countries would overstate the economic welfare of country A compared to
B.
Transcribed Image Text:QUESTION 18 If country A had a smaller underground economy than country B, and country A's citizens worked more hours per week than the citizens of country B, other things equal, then it is impossible to know which direction GDP comparisons between the countries would be biased as measures of the economic welfare of the two countries. b. it would not introduce any bias in using GDP to compare economic welfare between the countries. GDP comparisons between the countries would understate the economic welfare of country A compared to Od.B. GDP comparisons between the countries would overstate the economic welfare of country A compared to B.
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