Explain Why It Is the Case That the Value of Intermediate

question 32

Essay

Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

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Definitions:

Interest Rates

The expense incurred when taking out a loan, usually represented as a yearly percentage rate of the principal amount.

Quantitative Easing

Fed purchases of long-term assets to stabilize financial markets, reduce long-term interest rates, and improve the investment environment.

Long-Term Assets

Long-term assets are resources owned by a company projected to provide economic value for more than one fiscal year, such as real estate, machinery, and patents.

Interest Rates

The cost of borrowing money or the return on investment for savings, playing a central role in monetary policy and financial decision-making.