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Q. Sale of drugs is illegal. AI Capon buys drugs worth $10,000 and sells them for $25,000. Now indicate who is correct.
A. The statistician says that he has added value of $15,000 and hence, national income will go up.
B. The income tax official says that he has not declared his income so it is not recorded, and national income will not go up.
C. The social worker says that he is employing 100 people in his drug business and their income is raising the national income.
D. The policeman says it is illegal and hence to be included in the national income.
What is the correct option?
And also how do we treat underground economy in national income accounting? Rationale please ?
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