Which of the following rules does not help economists avoid double counting in their computation of gross domestic product?
A) Include only goods and services produced in the time period under study.
B) Do not include intermediate goods in the computation of total production.
C) Attribute to each industry only the difference between the value of its product and the value of its inputs.
D) Exclude the value of any good or service exported to another country from which we purchase goods and services.
E) Do not include transfer payments in the computation of total income.

Question

Quizplus · Accepted Answer

The correct approach to avoid double counting in GDP computation involves excluding intermediate goods (to avoid counting the same value multiple times as it becomes part of a final product) and focusing on the value added at each production stage. However, excluding the value of exports (D) is incorrect because exports are a part of a country's GDP, representing goods and services produced domestically but sold abroad. The other options (A, B, C, E) are legitimate methods to avoid double counting.

Which of the Following Rules Does Not Help Economists Avoid