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Why are intermediate goods excluded under the Final Goods (Final Product) Approach?

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Question

Why are intermediate goods excluded under the Final Goods (Final Product) Approach?

Options

  • To calculate inventory accumulation

  • To prevent double counting

  • To include imports

  • To include depreciation

MCQ
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Solution

Intermediate goods are already embodied in final goods. Excluding them prevents double counting in the aggregate.

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