How Are Intermediate Goods Accounted for When Calculating GDP

question 88

Multiple Choice

How are intermediate goods accounted for when calculating GDP?

• A) The value of all intermediate goods is included in GDP.
• B) The value of intermediate goods is included in GDP only if they were produced in the previous year.
• C) The value of intermediate goods is included in GDP only if they are purchased by firms rather than households.
• D) The value of intermediate goods is not included in GDP unless they are part of inventory.

---

Definitions:

Redistribution

The transfer of income, wealth, or resources from certain individuals or groups to others by means of a social mechanism such as taxation, charity, welfare, or public services.

Unexpectedly High

A term describing something that surpasses anticipated levels or estimates, often leading to surprise or a need for adjustment.

Shoeleather Costs

The increased costs of transactions caused by inflation, such as the time and effort spent to avoid holding onto cash that is rapidly losing value.

Redistributional Effects

The impact of policies or economic conditions on the distribution of income or wealth among the population, potentially altering inequality levels.