If country A has a bigger underground economy than country B, and country As citizens work fewer
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If country A has a bigger underground economy than country B, and country A’s citizens work fewer hours per week than the citizens of country B, other things being equal, then
a. GDP comparisons between the countries would overstate the economic welfare of country A compared to B.
b. GDP comparisons between the countries would understate the economic welfare of country A compared to B.
c. 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.
d. it would not introduce any bias in using GDP to compare economic welfare between the countries.
e. none of the above would be true.
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