Attempting to calculate the value of an economy by adding up the value of every good and service produced would lead to:
A) overcounting, as the value of intermediate products would be counted twice.
B) overcounting, as every good sold is marked-up in price.
C) undercounting, as most goods are not sold in retail markets.
D) undercounting, as the value of money changes over time.

Question

Quizplus · Accepted Answer

Intermediate products are goods used as inputs by other producers in the production process. If their value was counted in the final calculations, it would lead to overcounting and inflation of the true value of the economy.

Attempting to Calculate the Value of an Economy by Adding