Intermediate Goods Are Not Included in GDP Because

question 43

Multiple Choice

Intermediate goods are not included in GDP because:

• A) certain goods that are used in the production of a final good would be counted twice.
• B) the value of goods bought by producers to make something else would be counted twice.
• C) the value of goods used by firms to make the goods they sell is included in the firm's product; accounting for the value twice would overestimate GDP.
• D) All of these statements are true

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Definitions:

Synergy

The concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts.

Cost Complementarity

Occurs when the cost of producing one good decreases with the increase in production of another good, showing a synergy between the production processes of two goods.

Diseconomies Of Scope

The phenomenon where the cost of producing two or more products together is higher than producing them separately.

Economies Of Scope

cost advantages that enterprises obtain due to the efficient allocation and utilization of resources across multiple products or services.