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?

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.

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