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Why are final goods included in GDP?

Answer and explanation

Correct answer: To avoid double counting

GDP measures the market value of final goods and services produced during a period. Their value already includes the value of intermediate inputs used in production, so counting those inputs separately would count the same output more than once. Hence option A is correct. Taxes, population and money supply are not the reason final goods are selected.

Related tags

GdpFinal GoodsIntermediate GoodsDouble CountingGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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