Choose if the given statement is True/False.

The value of all the intermediate goods is counted while calculating the value of GDP.

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True

False

answer is B.

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Detailed Solution

The given statement is False.
Gross Domestic Product (GDP) is the monetary value of all final goods and services produced within a country's geographical boundaries during a given year. The given definition clearly states that the GDP includes only the value of final goods and not intermediate goods. Final goods refer to those goods used directly by the end consumers, either for consumption or investment. Whereas "intermediate goods" are goods that are not directly consumed by consumers but are used in the production of the final goods and services that will be consumed. If we count the value of intermediate goods separately in the GDP calculation, it will double-count such goods.

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