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2 years ago

Adding the market value of all final and intermediate goods and services in an economy in a given year would result in?

1 answer:

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When the market value of all final and intermediate goods and services in an economy are added up in a given year, this would lead to <u>Double Counting. </u>

<h3>What is double counting?</h3>

Double counting is a problem in Gross Domestic Product calculation where intermediate goods are added to final goods to determine the country's productivity.

Adding intermediate goods is a faux pass because the value of intermediate goods are included in the final goods and services price so there is no need to add them again.

If they are added, then the value of the intermediate goods would have been counted twice or double. This is where double counting comes from.

For instance, when making bread, flour is an intermediate good. The bread already includes the cost of this flour so adding the cost of the flour would mean inflating the true cost of the bread.

In conclusion, this is double counting.

Find out more on double counting at brainly.com/question/1112587

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