All categories

3 years ago

Why are only final goods and services included in the calculation of GDP?

Business

1 answer:

zavuch27 [327]3 years ago

5 0

Answer:

Only final goods and services are included in the calculation of GDP to avoid counting things multiple times.

Explanation:

In the calculation of the GDP only final goods and services are included because the prices of the these already have the costs of all the things that were used to produce them. If we count the intermediate products and services that were used for the final output, we will be double counting which will give a result that is not a correct estimation.

You might be interested in

IBM wants to issue new 20-year bonds. The company currently has 8.5 percent bonds with face value of $1000 on the market that se

alexandr1967 [171]

Answer: 8.62%

Explanation:

Based on the information given, the coupon rate on the new bonds if the firm wants to sell them at par will be calculated thus:

The following information can be gotten from the question:

Par Value = $1,000

Current Price = $994

Time to Maturity = 7 years

Annual Coupon Rate = 8.50%

Semiannual Coupon Rate = 8.50%/2 = 4.25%

Semiannual Coupon = 4.25% × $1,000 = $42.50

Semiannual Period to Maturity = 7/½ = 14

Let the semiannual Yield to maturity be represented by x Therefore,

994 = 42.50 × PVIFA(x, 14) + 1,000 × PVIF(x, 14)

Then, we'll use the financial calculator where,

N = 14

PV = -994

PMT = 42.50

FV = 1000

Based on this, the value of x will be 4.308%.

Since the Semiannual YTM is 4.308%, then the Annual YTM will be:

= 2 × 4.308%

= 8.616%

= 8.62%

Therefore, the coupon rate should be 8.62%

8 0

3 years ago

Which of the following is a deposit institution?

scZoUnD [109]

Answer:

A credit union

Explanation:

As it says in Chapter 5,

"The financial institutions that most people use serve as intermediaries between suppliers (savers) and users (borrowers) of funds. These deposit-type institutions include commercial banks, savings and loan associations, mutual savings banks, and credit unions" (p. 7, or 142)

The rest are other financial institutions

"Financial services are also available from institutions such as life insurance companies, investment companies, finance companies, mortgage companies, pawnshops, and check-cashing outlets" (p. 9, or 144)

7 0

3 years ago

An organization has identified a new business process that will revolutionize its industry. To obtain the software that will be

nikklg [1K]

Answer: Developing a one-of-a-kind application using custom development

Explanation:

According to the given question, an organization is necessary for developing an application for the purpose of custom development by obtaining the software that is necessary for supporting the overall business process and also managing the various function in the firm.

The custom application development is basically helps in designing the various types of applications in an organization for the users a it helps in increase the productivity and also the performance of the company.

Therefore, The given answer is correct.

5 0

3 years ago

On July 5, Harris Company purchased supplies from the hardware store for $600 on account. On July 10, Harris receives a bill fro

vekshin1

Answer:

Debit Accounts Payable 600, Credit Cash 600

Explanation:

as goods are purchased on credit initially it will be recorded on parable.

And when it will be paid the general entry will be:-

Account payable debit =600

cash credit = 600

Harris record the transaction on July 17

Debit Accounts Payable 600,

Credit Cash 600

3 0

4 years ago

John would like to move from the city into the suburbs and has been saving up a large down payment for a home. Which is the most

MrMuchimi

The most cost effective way for John to buy a house in the suburbs is:

a.Move to the suburbs and rent a house for one year before purchasing a home.

This is to test the waters. During this time, he has to acclimatize himself into living in a new environment. He has to discover the pros and cons of living in the suburbs compared to living in the city like travel time in going to work, etc.

If after a year, he finds its more beneficial to live in the suburbs, then he can buy a house there. On the other hand, if he finds it costly to live in the suburbs compared to living in the city, he simply has to pay the necessary rent and utility bills, pack up his bags, and go home.

6 0

3 years ago

Read 2 more answers