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.
Frequently asked questions
What is the correct answer to this question?
To avoid double counting
Why is this the correct answer?
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.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
