Question

Why are only final goods and services included in the computation of GDP?

Answer 1

Ans:

GDP refers to the final value of all goods and services produced within a country during a given year. GDP does consider the value of intermediate goods and services or used goods in order to avoid double counting. The value of the used goods are already counted in the previous year's GDP. Intermediate goods and services are used to produce final goods and services. It means the value of Intermediate goods and services is included in the final value of goods and services. So the value of Intermediate goods and services is not considered in the computation of GDP.