Question

1) Determine whether each of the following outputs is considered an intermediate good, a final good,...

1) Determine whether each of the following outputs is considered an intermediate good, a final good, or neither.

e. The brand new 2018 Mazda CX-9 that I purchased from Jim Bass on February 2, 2018.

Answer is neither, but why? Is it because the item was produced in 2018 and therefore on the 2018 GDP?

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Answer #1

The brand new 2018 Mazda CX-9 that was purchased from Jim Bass on February 2, 2018 would be part of the GDP calculation of the year in which it was produced. The value of Mazda CX-9 would have been included as final good in the GDP of the year 2018. No new value has been added in the current year, which is why the purchase will neither be taken as intermediate or final. If included it would lead to double counting. One, when it was included in 2018 and second, in the year 2019. So we include this in the year of production only.

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