How is a potato treated in GDP terms?
A) It is always counted as an intermediate good.
B) It is counted as a final good if it is used by a restaurant to make French fries.
C) It is counted as a final good if it is used by a consumer who makes mashed potatoes for her own consumption.
D) It is always counted as a final good.

Question

Quizplus · Accepted Answer

A potato is counted as a final good when it is purchased by a consumer for personal consumption, such as making mashed potatoes at home. If it is used by a business in the production of another good, like a restaurant making French fries, it is considered an intermediate good and not counted separately in GDP to avoid double counting.

How Is a Potato Treated in GDP Terms