Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP
Intermediate goods produced and sold during the year are not included separately as part of GDP because the value of those goods is included in the value of the final goods produced from them. If the intermediate good is produced but not sold during the year, its value is included as inventory investment for the year in which it was produced. If inventory investment was not included as part of GDP, true production would be underestimated for the year the intermediate good went into inventory, and overestimated for the year the intermediate good is used or sold.
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A business owner applies for a bank loan to launch a fairly low-risk project. After receiving the loan, she cancels the low-risk project and instead uses the borrowed funds for a high-risk venture. This is an example of
A) financial intermediation. B) the transactions approach. C) moral hazard. D) capital controls.
Suppose u = those adults who are unemployed and seeking work; e = those adults who are employed; and NLF = those adults not in the labor force. Which expression would equal the BLS definition of the unemployment rate?
a. u / (e + NLF) b. u / e c. u / (u + e) d. u / (e + NLF) e. u / (u + e ? NLF)