GDP Does NOT Include Intermediate Goods Because

question 54

Multiple Choice

GDP does NOT include intermediate goods because

• A) intermediate goods are not valuable.
• B) intermediate goods are not useful to consumers.
• C) that would count the value of intermediate goods twice.
• D) that would understate the true size of GDP.

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Definitions:

Estimated Overhead Cost

Estimated overhead cost refers to the projected expenses related to manufacturing overhead or indirect costs that are expected to be incurred over a specified period.

Predetermined Overhead Rates

A rate calculated prior to the accounting period that is used to apply manufacturing overhead costs to products or job orders, based on an estimated amount of allocation base.

Accounting Period

A specific period of time used for financial reporting and analysis, often a quarter or a year.

Estimates

Approximations used in accounting when precise data is unavailable, often used for calculating allowances for doubtful accounts or depreciation.