Question

According to the text, the part of a nation's income that, because of unreporting or underreporting, is not measured by official statistics is known as the

A. hidden economy.
B. gray market.
C. barter system.
D. underground economy.
E. shadow market.

Answer 1

The underground economy consists of unreported or underreported economic activities outside of official governmental oversight, making up a significant portion of the nation's GDP.

Step-by-step explanation:

The part of a nation's income that is not measured by official statistics due to unreporting or underreporting is known as the underground economy. This term refers to all the economic activities that are not monitored or taxed by the government, such as services paid 'under the table,' illegal sales, and other informal work like unlicensed street vending. Friedrich Schneider's study estimated that the underground economy in the United States constituted 6.6% of the GDP in 2013, equaling nearly $2 trillion.