contestada

The purchase of fuel, seed, and fertilizer are intermediate costs to a wheat farmer and _________ be included in the GDP until the final product (bread) is sold to a consumer..

A. will not
B. will
C. will sometimes
D. none of the above

Respuesta :

Answer:

A. will not

Explanation:

GDP  is the total value of goods and services produced in an economy in a period.  In calculating GDP, economists consider the value of final goods only.  The use of final products only eliminates the possibilities of double counting.

Intermediate goods are products used to manufacture other goods. They are not included in GP computation as it will amount to double counting. GDP double counting is when a product or service is counted more than once. If the seeds, fuel, and fertilizer are counted when purchased, they are likely to be counted again in bread, which is the final product.  

If the fuel, fertilizer, and seed are for consumption, i,e. final goods, they would be included in GDP calculation.