As an indicator of aggregate production the calculation of G

As an indicator of aggregate production, the calculation of GDP does not have any limitation. True or false? Justify Briefly.

False.

GDP has following limitations:

(1) It ignores value of the sale of an used good.

(2) It ignores imputed cost (for example, if someone mows her own lawn or cooks for herself).

(3) Shadow economy is ignored.

Therefore, as an indicator of aggregate production, reported GDP data is understated.