Q. 14.0( 6 Votes )

Why is the value of intermediate goods not taken for the calculation of GDP?

Answer :

Only the final value of goods is considered into consideration while calculating GDP as the value of all the intermediaries’ goods which are used for making final good is already considered in the value offinal good. It is done to avoid double calculations of the goods. For example, a farmer produces wheat which is sold at 10R sperkg, wheat isused for making floor which has the value of 60R sand again if it is used for making biscuits, suppose the value of biscuits is 300Rs, the only value of biscuits will be considered.


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