Question

To avoid double-counting when calculating GDP, it is best to: Group of answer choices count used goods. count the value added at each stage of production. count all goods and services purchased by consumers, firms, and the government. count stocks and bonds. count the value of goods and services produced at every stage of production.

Answer 1

Answer:

count all goods and services purchased by consumers, firms, and the government.

Explanation:

GDP is a measure of the total products and services produced in an economy per period. Economists calculate GDP to understand the directions of the economy. An increase in GDP indicates growth. In calculating the GDP value, economists consider finished consumer products only.

Double-counting means calculating the value of output multiple times. To avoid double-counting, economists do not consider work-in-progress and goods used to produce more products and services.  Work is progress is goods still in the production process. If counted, there is a possibility of them being counted again as finished products. Capital goods or goods used to produce other goods are counted once as the finished product.