Gross Domestic Product Calculations Count Only Final Goods and Services

question 52

Multiple Choice

Gross domestic product calculations count only final goods and services because

• A) these are the only goods and services that are purchased in an economy.
• B) counting all goods and services would lead to double-counting of many activities.
• C) it is difficult to measure the prices of intermediate goods produced.
• D) one cannot calculate the quantities of intermediate goods produced.

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Definitions:

Inventory Units

Quantities of goods held by a business for the purpose of sale or production.

Purchase Discounts

Reductions in the purchase price of goods, usually provided by a supplier to the buyer for early payment or bulk buying.

Net Price Method

A pricing strategy that considers the net cost of a product after deducting any discounts or allowances.

Gross Price Method

A pricing approach where the price of goods or services is determined without deducting any trade discounts or allowances.