Question

Why do economists include only final goods in measuring GDP for a particular year? Why don’t they include the value of stocks and bonds sold? Why don’t they include the value of used furniture bought and sold?

Answer 1

Answer:

Only final goods and services are included in the GDP because if intermediate goods were included, then overcounting would occur and the GDP would appear to be much larger than what it really is.

Simply because the money raised by issuing stocks and bonds is used to purchase production factors (capital, materials and labor), it follows the same logic as intermediate goods.

Used goods are not included simply because they were already included in a the GDP of a previous year, whenever they were original sold.

Explanation: