Question

Which of the following are not part of "final goods," as used in the definition of GDP?

A) Consumption goods.
B) Investment goods.
C) Exports.
D) Intermediate goods.

Answer 1

Intermediate goods are not part of the final goods included in GDP.

Step-by-step explanation:

In the context of GDP, intermediate goods are not considered as part of the final goods.

GDP counts only the final output of goods and services to avoid double counting. Intermediate goods are goods that are used in the production of other goods, rather than being sold directly to consumers. They include materials, components, and semi-finished products that are further processed before becoming part of the final goods.

For example, if a car manufacturer purchases tires from a tire company, the tires are considered an intermediate good because they will be used in the production of the final car, which is the final good included in GDP.