GDP includes the value of final goods, and not intermediate goods, because:
A)the value of intermediate goods is already included in the value of final goods
B)the value of intermediate goods is too difficult to measure
C)the value of intermediate goods is measured by GNP
D)the value of intermediate goods depends on the number of separate production processes

Question

Quizplus · Accepted Answer

Intermediate goods are used as inputs in the production of final goods. If the value of intermediate goods was included in the calculation of GDP, it would result in double-counting, as the value of intermediate goods is already included in the value of final goods. Therefore, to avoid double-counting, only the value of final goods is included in the calculation of GDP.

GDP Includes the Value of Final Goods, and Not Intermediate