List and discuss two reasons why national income accountants could make errors in measuring GDP.

GDP could be mismeasured because of the existence of the underground economy, and because there are no market prices for the government's contribution to GDP. The NIEA measures only market activity, so if there are illegal transactions involving drugs and prostitution, for example, these will go unrecorded, as will cash transactions and barter transactions designed to avoid taxation. All of this illegal activity falls under the umbrella of "underground" activities. As well, when the government produces goods and services, what is recorded in GDP are the wages and salaries paid to employees. But this could overvalue some government goods and services, and undervalue some others.

Thank you