Question content area

Part $1$

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.

$$Source: Chao$$ Deng, "Want a Drink at Mr$.$ Li's Bar? Please Climb through the$$ Window," Wall Street

Journal$,$

February$27,2018.$

a$.$ What does the article mean by a business$$ "operating illicitly"? Why would a business operate$$ illicitly?

A$.$

It refers to business owners like Mr$.$ Li who want to avoid making repairs or improvements to their businesses.

B$.$

It refers to businesses that require customers to enter the business through a window or back door instead of the front door.

C$.$

It is when businesses try to help customers conceal their purchasing$$ habits, such as providing a$$ back$-$door entrance.

D$.$

It means concealing transactions from the government to avoid taxes or regulations or because the goods are illegal.

Part $2$

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

Since these businesses are part of the

$$

$$

informal

formal

$$sector$,$ the output of these businesses

$$

$$

will not

will

be included in$$ China's GDP$.$

Part $3$

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

A$.$

Businesses in the underground economy will be subject to increased government regulation and forced to pay taxes on the income they earn.

B$.$

It will be difficult for the government to determine whether its policies are effective at increasing or decreasing the growth rate of GDP$.$

C$.$

$$It$\text{'}$s not likely to cause any problems since GDP is only used to measure the$$ economy's performance over short periods of time.

D$.$

Both A and B are correct.