The reason only newly produced goods and services are counted in GDP is that ________.
A)it is very difficult to impute a value to used goods
B)most expenditures on used goods and services take place outside the market
C)it does not help economists make better economic predictions because second-hand goods rarely have any residual value
D)it allows economists to avoid double counting the production of goods and services
E)none of the above

Question

Quizplus · Accepted Answer

Only newly produced goods and services are counted in GDP to avoid double counting the production of goods and services. If used goods were included, the value of the final product would include the value of the intermediate goods used to produce it, leading to overstatements in GDP.

The Reason Only Newly Produced Goods and Services Are Counted