--%>
Assignment Help - homework help

Measuring net output GDP in a specific year

Why do national income accountants comprise only final goods in measuring net output GDP in a specific year? Why don't they comprise the value of stocks and bonds bought & sold? Why don't they comprise the value of utilized furniture bought and sold?

E

Expert

Verified

They are excluded since the dollar value of ultimate goods includes the dollar value of intermediate goods. If intermediate goods were counted, then multiple counting would take place. The value of steel (intermediate good) utilized in autos is included in the price of the auto (the final product).

     This value is not comprised in GDP since such sales and purchases simply transfer the ownership of existing assets; such purchases and sales are not themselves (economic) investment and therefore should not be counted as production of ultimate goods and services.

     Utilized furniture was generated in some previous year; it was counted as GDP then. Its resale does not measure new production.

   Related Questions in Finance Basics

  • Q : Define Employee Compensation or

    Employee Compensation or Retirement: Salary, advantage, employer retirement rate contribution adjustments, and any other associated statewide compensation adjustments for the state employees. Different 9800 Items of the Budget Act suitable funds for c

    		•
  • Q : Mascot Simulation Simulation with

    Simulation with Crystal Ball Provided Workbook: Mascot Simulation Relevant Readings:"Discounted Cash Flow Modeling" folder + Text

    		•
  • Q : Define the term State Fiscal Year

    Define the term State Fiscal Year: This is the period beginning from July 1 and continuing through the subsequent June 30.

    		•
  • Q : Financial strategy describe the sales

    describe the sales forecasting process ?

    		•
  • Q : Near-term policy Normal 0 false false

    Normal 0 false false

  • Q : Explain regulations Regulations: It is

    Regulations: It is a rule, order, or standard of common application issued by a state agency to interpret, implement, or make specific law enforced or managed by it, or to govern its measures. With state government, the procedure of adopting or modify

    		•
  • Q : Describe capital rationing Describe

    Describe capital rationing? Should a firm practice capital rationing? Why? Capital rationing is the practice of setting dollar restriction on what will be invested in new capital budgeting projects. Proprietorships, partnerships and private c

    		•
  • Q : Consolidated balance sheets for the

    In the below table you will determine consolidated balance sheets for the chartered banking system & the Bank of Canada. Employ columns 1 through 3 to show how the balance sheets would read after each of transactions a to c is finished. Analyze

    		•
  • Q : What is Budget Change Proposal Budget

    Budget Change Proposal (BCP): It is a proposal to modify the level of service or funding sources for activities sanctioned by the Legislature, suggest new program activities not presently authorized, or to remove existing programs.

    Q : 222 what do you understand by planning

    what do you understand by planning premises

    		•