Question

Which of the following items would be considered double (or multiple) counting in the calculation of GDP?

1) Intermediate goods
2) Final goods
3) Government spending
4) Exports

Answer 1

Intermediate goods would be considered double counting in GDP calculations, as their value is already included within the value of final goods.The correct answer is option A.

Step-by-step explanation:

The item from the provided list that would be considered double counting in the calculation of GDP is intermediate goods.

Intermediate goods are those that are used to produce other goods and are included in the value of the final goods. Double counting occurs when the value of intermediate goods is counted separately and then again as part of the final goods.

To accurately measure GDP, statisticians only count the value of final goods and services that are the end-products of the production process and sold for consumption, investment, government, and trade purposes.

This method ensures that the size of the economy is not overstated. In contrast, final goods, government spending, and exports are all correctly included in the calculation because they represent final consumption or output within the economy.The correct answer is option A.