Intermediate goods are goods that are used up entirely in the production of final goods. As such, intermediate goods
A) are excluded in calculating Gross Domestic Product (GDP) because they are not valuable.
B) are excluded in calculating Gross Domestic Product (GDP) because to do so would be to double count them.
C) make up only a small portion of Gross Domestic Product (GDP).
D) are included in Gross Domestic Product (GDP) only if produced within the borders of the United States.

Question

Quizplus · Accepted Answer

Intermediate goods are not included in the calculation of GDP to avoid double counting. GDP only includes the value of final goods and services, which already incorporates the value of intermediate goods used in their production. Therefore, including intermediate goods would inflate the GDP, leading to an inaccurate measure of the economy's actual production.

Intermediate Goods Are Goods That Are Used Up Entirely in the Production