Explain Why Only Final Goods Are Included in GDP

question 127

Essay

Explain why only final goods are included in GDP.

Understand the concept of transaction costs and their impact on market exchanges.

Identify the role and functions of middlemen in reducing transaction costs and facilitating trades.

Define and calculate opportunity costs in various economic scenarios.

Analyze the effects of high transaction costs on the number of exchanges and market efficiency.

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Definitions:

Rental Income

Revenue generated by leasing property or equipment.

Primarily Rental

Pertaining to the use of property mainly for rental purposes, which may affect the tax treatment of income and expenses related to the property.

Primarily Personal

This term typically pertains to expenses or activities that are mainly for personal benefit, and therefore, not deductible for tax purposes if related to business.

Net Loss

The result when a company's expenses exceed its revenues during a specific period, indicating negative profitability.