In computing GDP,
A) expenditures on used goods are included.
B) production added to inventories is excluded.
C) the amount of production in the underground economy is imputed.
D) the value of intermediate goods is included in the market price of the final goods.

Question

Quizplus · Accepted Answer

Only the value of final goods and services is included in GDP calculation. Intermediate goods are not included because their value is already incorporated in the market price of the final goods. Expenditures on used goods are excluded because they are not newly produced goods and the production added to inventories is included because it contributes to the value of the final goods. The underground economy is also excluded because it is illegal and not officially reported.

In Computing GDP