Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions:

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

Question

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the next three questions:
 
-To avoid double-counting when calculating GDP,it is best to:
A) count the value of goods and services produced at every stage of production. 
B) count the value added at each stage of production. 
C) count used goods. 
D) count stocks and bonds. 
E) count all goods and services purchased by consumers, firms, and the government.

Quizplus · Accepted Answer

To avoid double-counting, it is best to only count the value added at each stage of production, rather than the full value of the goods and services produced. This ensures that only the final value of the good or service is included in GDP.

Consider the Following Data, Which Shows the Quantities and Prices