--%>
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 : Externally held public debt and

    Normal 0 false false

  • Q : The official unemployment rate Normal 0

    Normal 0 false false

    		•
  • Q : State Schedule 11 Schedule 11 : It is

    Schedule 11: It is the outdated word for “Supplementary Schedule of Operating Expenses and Equipment.”

    		•
  • Q : Purchasing power parity of US and

    Under what condition would the U.S. dollar and the Canadian dollar said to be have achieved purchasing power parity? The U.S. dollar and the Canadian dollar would be assumed to have achieved purchasing power parity while the exchange rate reflec

    		•
  • Q : Describe the risk-return relationship

    Describe the risk-return relationship.The relationship among risk and required rate of return is term as the risk–return relationship.  This is a positive relationship since the more risk assumed, the higher the required rate of retur

    		•
  • Q : Components of the M1 money supply

    Normal 0 false false

  • Q : Describe the benefits of paying late

    Describe the benefits of "paying late" (but not too late) and how do companies try to do this? Since money has time value, the later cash is paid, but not too late, the better. Companies employ remote disbursement banks to facilitate holding at

    		•
  • Q : FIN 335: Time Value of Money Problems

    FIN 335: Time Value of Money Problems  Computed on a Texas Instrument BA II Plus financial calculator  Before you start:  ? The calculator com

    		•
  • Q : Revision Order #2 Hello, You folks

    Hello, You folks recently completed an order for me. I'm very impressed and much thanks in advance. I'd like to submit more problems (8 attached) if you can have the same expert work on these please? Some of the #'s were slightly modified from my previous order, so should be easier than starting

    		•
  • Q : Define Allotment Allotment : The

    Allotment: The permitted division of an amount (generally of an appropriation) to be expended for a specific purpose throughout a particular time period. An allotment is usually authorized on line item expenditure basis by program or

    		•