Question

Select all that apply.

Select the items that apply to calculating the Gross Domestic Product.
A.) final goods and services
B.) intermediate goods and services
C.) last year's products
D.) new products

Answer 1

In calculating GDP, the applicable items are final goods and services and new products; intermediate goods and last year's products should be excluded to prevent double counting.

Step-by-step explanation:

When calculating the Gross Domestic Product (GDP), it is essential to consider only the final goods and services as well as the new products produced within a country during a given year. Final goods are at the furthest stage of production at the end of a year, and including them avoids the problem of double counting, which is the erroneous practice of counting the value of a product multiple times as it goes through various production stages.

Intermediate goods, like components that go into the production of final products, should not be counted separately in GDP calculations, because their value is already included in the value of final goods. Additionally, products from the previous year, or last year's products, are excluded from the calculation since GDP represents the current year's production value.

Answer 2

A final goods and services