Question : Which of the following is included in the calculation of GDP?
Option 1: Intermediate goods
Option 2: Final goods and services
Option 3: Secondhand goods
Option 4: Transfer payments
Correct Answer: Final goods and services
Solution : The correct answer is b) Final goods and services.
Gross Domestic Product (GDP) is a measure of the total value of all final goods and services produced within a country's borders during a specific period, typically a year. In the calculation of GDP, intermediate goods and services are not included. Only the final goods and services that are consumed by end-users or used for investment are counted.
To avoid double-counting, intermediate goods, which are used as inputs in the production process, are not directly included in GDP. Only the value of the final goods and services, which represent the end result of production, are taken into account.
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