GDP counts:
A) only final goods and services, because otherwise certain things would be double-counted and the GDP would be overestimated.
B) only intermediate goods and services, because those are easier to track.
C) both intermediate and final goods and services because it is important to capture all values, regardless of which market they take place in.
D) all values that are reported to the government.

Question

Quizplus · Accepted Answer

GDP only counts final goods and services because including intermediate goods would result in double-counting and an overestimation of GDP. For example, if the value of steel is counted when it is sold to a car manufacturer and then again when the car is sold to a customer, the GDP would be inflated. Therefore, only the final product (the car) should be counted in GDP.

GDP Counts