Underground/illegal activities (the initial transaction) are not counted in GDP because

a. some underground activities are illegal and the government doesn't want to place, for instance, drug dealers on an equal footing with small businesses.

b. there are no written records of underground activities.

c. this decision was made in the 1930s and no one has gotten around to changing it yet-there is such a thing as the "GDP-counting" lag.

d. although it is possible to accurately measure underground activities, it is harder than measuring above-ground activities because with the latter, one doesn't have to dig as deep.