Question

why do economist include only final goods and services when measuring GDP for a particular year?...

why do economist include only final goods and services when measuring GDP for a particular year? Why don't they include the value of the stocks and bonds bought and sold? Why don't the include the value of THE USED FOUNITURE BOUGHT AND SOLD?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The dollar value of intermediate goods is calculated when the dollar value of final goods is measured. If the dollar value of intermediate goods is added to measure GDP then multiple counting would occur. So economist includes only final goods and services when measuring GDP for a particular year.

The value of stocks and bonds bought and sold are simply transfer the ownership of the existing assets. Such sales and purchases are not themselves investment and thus should not be measured as the value of final goods and services.

The dollar value of used founiture is already added to GDP. If again it is added to GDP double counting would occur. So it is not included in GDP.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Why are only final goods and services included in the computation of GDP?
Why are only final goods and services included in the computation of GDP?
The best reason economists take only final goods and services into account when calculating GDP is...
The best reason economists take only final goods and services into account when calculating GDP is that this is the way things have always been done, but there is no particular reason why. they want to avoid the problem of final counting. they want to avoid the problem of double counting. this is the only way it can be done. PreviousNext
Real GDP will decrease... A) Only when the production of goods and services decreases B) When...
Real GDP will decrease... A) Only when the production of goods and services decreases B) When the production of goods and services and prices decrease C) When prices decrease or production decreases D) Only when prices decrease
Why do economists prefer real GDP to nominal GDP when measuring the size of an economy?...
Why do economists prefer real GDP to nominal GDP when measuring the size of an economy? Question 8 options: When an economy experiences inflation, its nominal GDP tends to overvalue an actual change in the quantity of goods and serviced produced. Real GDP rises for two reasons: an increase in output and an increase in prices. When an economy experiences inflation, its real GDP is greater than its nominal GDP. Nominal GDP is GDP adjusted for inflation.
We know that GDP is the value of final goods and services produced in the economy...
We know that GDP is the value of final goods and services produced in the economy in a given year. Briefly explain how the following are treated in the measurement of GDP: a) The value of intermediate goods; b) The value of financial transactions (like depositing money in the bank); c) The value of self-produced goods, like home child care; and d) the value of leisure activities.
Gross domestic product (GDP) is a measure of the market value of final goods and services...
Gross domestic product (GDP) is a measure of the market value of final goods and services produced within the borders of a country during a specific time period, usually a year. What is the GDP deflator? How does the GDP deflator relate to real GDP? Review GDP and nominal versus real. Real adjusts for inflation, so how do we arrive at the real GDP number from nominal GDP? Review the GDP deflator formula, where GDP deflator = (Nominal GDP/Real GDP)...
The Gross Domestic Product or GDP is the monetary measure production of final goods and services...
The Gross Domestic Product or GDP is the monetary measure production of final goods and services within the boundary of the United States in a financial year or specific period. The GDP tells us if the economy is expanding due to producing more goods and services or contracting due to less output. Anything that it is built in the United States contributes to the figures instead of abroad. The Gross Domestic Product or GDP does not measure the quality of...
1. Nominal GDP increases from year 1 to year 2. Therefore: a.) We produced more goods...
1. Nominal GDP increases from year 1 to year 2. Therefore: a.) We produced more goods and services in year 1 b.) We produced more goods and services in year 2 c.) It is not possible to determine in which year we produced a greater quantity of goods and services 2. Net export spending will have a negative value when the country exports more goods than it imports from other countries. T/F 3. A firm produces 100 units of some...
17) To avoid double counting in the computation of GDP, only the value of goods are...
17) To avoid double counting in the computation of GDP, only the value of goods are included A final B used C intermediate D investment
Despite the fact that investment only makes up about 20% of GDP, while consumption is about...
Despite the fact that investment only makes up about 20% of GDP, while consumption is about 60% (these numbers are averages over several years), investment is more important than consumption for understanding the short- term movements in GDP, why is that? Why should the three approaches to measuring GDP yield the same number? In practice they produce somewhat different numbers, why do you think that is? If the purpose of computing real GDP is to measure the quantity of goods...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT