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Explain the term GDP. Why are only \'final goods and services\' included in GDP? |
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Answer» Thank you so much GDP refers to Gross Domestic Product. It is the value of all final goods and services within a country during a particular year. G.D.P. is the sum of the money value of final goods and services produced in each sector during a particular year within domestic territory of a country.\xa0Only final goods and services are counted in G.D.P. because:\xa0(i)\xa0The value of final goods already includes the value of all intermediate goods.\xa0(ii)\xa0To count the value of the flour and wheat separately is therefore not correct because then we would be counting the value of the same things a number of times. |
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