Aty100
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I need help with the following three questions, I'm just working though a text book and don't know what to do for these.
Any help will me much appreciated. Thanks in advance.

a) suggest what financial incentives there might be for drug dealers to work in the black market economy rather than the official recorded economy.

b) why should self-builds b included rather than excluded from official GDP figures.

c) why might half million growth in self employment make GDP figures less reliable.
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narine2014
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a)-drug dealers will have to pay taxes (their revenue in the black market is much higher)
-they will have to be responsible for the consumers' reaction
-government might set quotas to the quantity of drugs sold

b)self-builds should be included in the official GDP figures because despite the fact that people make the good themselves(for personal use), they still buy raw materials(if not all, at least a part) which is a part of the inner transaction
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Salmang123
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1. can avoid income tax
2. will always have high demand as consumers are addicts
3. ^ this means that they can increase the price and still make as many sales
4. illegal drugs are expensive and so can be sold for ridiculous amounts
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Salmang123
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(Original post by narine2014)
a)-drug dealers will have to pay taxes (their revenue in the black market is much higher)
-they will have to be responsible for the consumers' reaction
-government might set quotas to the quantity of drugs sold

b)self-builds should be included in the official GDP figures because despite the fact that people make the good themselves(for personal use), they still buy raw materials(if not all, at least a part) which is a part of the inner transaction
in the text book "drug dealers" does not represent legal medication dealers but it represents illegal drugs such as heroine.
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username1628823
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(Original post by Aty100)
x

Question a has already been answered really well.

b. Self-builds still represent work being done in an economy.
Self-builds increase living standards, decrease negatives such as crime etc.
There is an opportunity cost to self-building; to exclude it from GDP is to have work potential disappear.
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Jampee
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(Original post by Aty100)
I need help with the following three questions, I'm just working though a text book and don't know what to do for these.
Any help will me much appreciated. Thanks in advance.

a) suggest what financial incentives there might be for drug dealers to work in the black market economy rather than the official recorded economy.

b) why should self-builds b included rather than excluded from official GDP figures.

c) why might half million growth in self employment make GDP figures less reliable.
Doing this question right now
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isthistaken
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(Original post by Aty100)
I need help with the following three questions, I'm just working though a text book and don't know what to do for these.
Any help will me much appreciated. Thanks in advance.

a) suggest what financial incentives there might be for drug dealers to work in the black market economy rather than the official recorded economy.

b) why should self-builds b included rather than excluded from official GDP figures.

c) why might half million growth in self employment make GDP figures less reliable.
A seems to have been done.

B) Self-builds are excluded from GDP because they're not sold. However, they should be included because they're still a final good which has been produced within an economy and has value.

C) The implication in this question is that self-employed workers may under-declare the value of the work that they've done over the course of a year in an attempt to avoid taxes. This means that GDP may be higher than reported and as such makes GDP figures less reliable.
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