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How Do We Handle Intermediate Goods and Services When Converting

Question 34

Multiple Choice

How do we handle intermediate goods and services when converting from GNE to GDP?


A) Intermediate goods are already counted in GNE, so they do not have to be added in to GDP.
B) Imported intermediate goods are counted in GNE, so they must be subtracted from GDP to avoid double counting.
C) Exported intermediate goods are counted in GNE, so they must be subtracted from GDP to avoid double counting.
D) We add (to GNE) the value of imported goods and services and subtract the value of exported goods and services to get GDP.

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