Question

A professional gambler moves from a state where gambling is illegal to a state where gam-bling is legal. Most of his income was, and continues to be, from gambling. His move a. raises GDP. b. decreases GDP. c. doesn't change GDP because gambling is never included in GDP. S D D after tax 10 20 30 40 50 60 70 80 quantity 1 2 3 4 5 6 7 8 9 10 price d. doesn't change GDP because in either case his income is included.

Answer 1

The answer is: A) raises GDP.

Step-by-step explanation:

If a gambler is a professional gambler (pays income tax on his gambling earnings) then when he moves from a state that prohibits gambling to a state that allows gambling, his earnings will increase the GDP.

The GDP only considers legal income, so illegal activities such as prostitution, drug trafficking, or illegal gambling are not included in the GDP. But if they become legal (e.g. some states legalized marijuana) then they should be included in the GDP.