Question

The firm that printed your textbook bought the paper from XYZ Paper Mills. Was this purchase of paper part of​ GDP? If​ not, how does the value of the paper get counted in​ GDP? This purchase of paper​ ______ part of GDP because the paper is​ ______ good.

Answer 1

Answer:

The purchase of paper is not included in GDP as it is an intermediate good. The value of paper will be included as a part of value of book.

Explanation:

The GDP is the value of final goods and services produce in a nation in a year. The paper used here is an intermediate good as it is further used to make textbooks. So it will not be included in the GDP.

An intermediate good is the type of good which is not directly consumed but is used in further production of goods and services.

The value of the textbook as a whole will be included as it is a final good. The value of paper will be included as a part of the value of textbooks.