Question

GNP accounts avoid double counting by including only the value of final goods and services sold on the market. Should the measure of imports and exports used in the GNP accounts therefore be defined to include only imports and exports of final goods and services received from and sold to other​ countries?A. ​No, total values and imports and exports should be included in the calculation of the GNP.B. Total value of imports should be​ included, but only the value of exports of final goods.C. ​Yes, only the value of final goods that are exported or imported should be included.D. Total value of exports should be​ included, but only the value of imports of final goods.

Answer 1

Answer:

A) ​No, total values and imports and exports should be included in the calculation of the GNP.

Explanation:

The gross national product (GNP) must include the value of all imports and exports including intermediary goods.

Intermediary goods are goods used in the production of final goods, e.g. wood used to build a house. Intermediary goods can sometimes be final goods depending what use will be given to them, e.g. a tire is an intermediary good in the production of a car but it is also a final good when you buy a new tire to replace an old tire.