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Question
GDP is the total value of ______ produced during a particular year.
Options
all goods and services
all final goods and services
all intermediate goods and services
all intermediate and final goods and services
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Solution
GDP is the total value of all final goods and services produced during a particular year.
Explanation:
To avoid double-counting, Gross Domestic Product (GDP) assesses only the monetary worth of final goods purchased by end users. The value of intermediary items (such as flour needed to bake bread) is already included in the product’s ultimate price, thus adding them separately would artificially inflate the economy’s true size.
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