During the Covid-19 pandemic, local governments ordered some businesses, including restaurants, gyms, and movie theaters to close, resulting in those businesses laying off workers. An article in the Wall Street Journal noted that some of these employees had decided to go into business for themselves, primarily in a "wide array of service businesses, including home improverent, food, beauty and health." They noted that some of these new businesses were "part of an underground economy--often one-person, cash operations
Source: Kim Mackrael, "In the Covid Economy, Laid-Off Employees Become New Entrepreneurs," Wall Street Journal, November 18, 2020.
a. What does the article mean by stating that these businesses were part of "an underground economy"?
A. Customers can only pay cash for their consumption of these goods or services.
B. All of these businesses operate in hidden locations so no one knows that they exist.
C. People are hiding the buying or selling of goods and services from the government.
D. They produce goods that are illegal
b. How did the existence of these businesses affect the measurement of U.S. GDP during the pandernic?
A. There is no effect, since the U.S. goverment can accurately determine the size of the underground econorny.
B. The underground economy is so small that it has no real effect on U.S. GDP measurements
C. There is no effect, since the U.S. goverment cannot accurately determine the size of the underground economy.
D. It would understate the U.S. GDP by even more than normal