ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Intermediate goods are not included in the calculation of a country’s GDP. The reason for not including them in the GDP is because it will lead to counting the value of the goods twice, and the norm is to count the price of final goods only once.

Detailed explanation-2: -Economists do not factor intermediate goods when they calculate gross domestic product (GDP). GDP is a measurement of the market value of all final goods and services produced in the economy. The reason why these goods are not part of the calculation is that they would be counted twice.

Detailed explanation-3: -The GNP excludes intermediate goods, second hand sales as well as financial transactions. The GNP is a money amount and must be adjusted for changes in the value of money.

Detailed explanation-4: -Because intermediate goods are components of finished goods, they’re excluded by economists when calculating a country’s gross domestic product (GDP).

Detailed explanation-5: -GDP is composed of goods and services produced for sale in the market and also includes some nonmarket production, such as defense or education services provided by the government.