Why are only final goods and services included in measuring GDP? Give examples to complete your answer
What will be an ideal response?
We purposely leave intermediate goods or services out of our calculation of GDP so we don't double count. Examples of this are not counting the tires produced by Firestone that are then sold to Ford to be placed on their new cars. If we counted the tires when they were produced by Firestone and then also counted them when they were part of the Ford, we would be double counting them.
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Fill in the blank: National income accountants who measure GDP try to avoid the ________ problem by only measuring the market value of all final goods and services produced within a country
A) double trouble B) double indemnity C) double counting D) double jeopardy E) double-your-pleasure
Which of the following is true about the combination of televisions and smartphones represented by point F in Figure 1.4?
A. Point F is unattainable even with advances in technology. B. Point F is inefficient now. C. Point F can possibly be reached if more economic resources become available or technology improves. D. Point F will be more easily attainable if the government takes control of all privately run factories.