[Related to the Apply the Concept: “Why Do Many Developing Countries Have Such Large Underground Economies?”] An article in the Wall Street Journal with the headline “Want a Drink at Mr. Li’s Bar? Please Climb through the Window,” describes how the city government in Beijing, China, “is bricking up restaurants, bars and other small businesses operating illicitly.” In response, the people who run these businesses are finding ways to direct customers to enter through windows or back doors.

a. What does the article mean by a business “operating illicitly”? Why would a business operate illicitly?

b. Briefly explain whether it’s likely that the output of these illicit businesses is included in China’s GDP.

c. If a government cannot accurately measure GDP, what problems can that cause for the government or for businesses in that country?