GDP counts only final goods and services because this

Question

Quizplus · Accepted Answer

GDP only counts final goods and services to avoid double counting of goods going through several stages of production. For example, if a farmer sells wheat to a miller, who in turn sells flour to a baker, who then sells bread to a consumer, counting the value of the wheat, flour, and bread in GDP would be double counting the value of the wheat and flour. By counting only the final good (in this case, bread), we avoid double counting and get a more accurate measure of the value of goods and services produced in a given year.

GDP Counts Only Final Goods and Services Because This