The underground economy means that GDP will overstate the actual level of economic welfare

In one year, a firm increases its production by $9 million and increases sales by $8 million. All other things in the economy remaining the same, which of the following is true?

A) GDP increases by $8 million and inventory investment decreases by $1 million. B) GDP increases by $9 million and inventory investment increases by $1 million. C) Inventory investment decreases by $1 million. D) GDP increases by $8 million and investment increases by $1 million. E) GDP increases by $17 million.

A recessionary gap in an economy can be closed with a contractionary monetary policy

a. True b. False Indicate whether the statement is true or false