Illustrate the example for double counting.

Question

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Answer 1

Question

Chapter 7, Problem 1VQP

To determine

Illustrate the example for double counting.

Expert Solution & Answer

Explanation of Solution

Double counting is the problem of estimating the values of goods and services more than once. During the accounting process of GDP, it includes only the final values of goods and services in an economy to avoid the problem of ‘double counting’. That means, the final value of products also includes the intermediate values of products.

For example, a firm sells cars at a cost of $28,000, and the company paid $250 for tires and $10,000 for other parts. Including all intermediate goods, the car will sell at the price of $28,000 and not by $38,250 ($28,000+ $250+$10,000). Hence, the GDP avoids double counting problem by including only the final values of goods and services.

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Answer 2

Question

Chapter 7, Problem 1VQP

To determine

Illustrate the example for double counting.

Expert Solution & Answer

Explanation of Solution

Double counting is the problem of estimating the values of goods and services more than once. During the accounting process of GDP, it includes only the final values of goods and services in an economy to avoid the problem of ‘double counting’. That means, the final value of products also includes the intermediate values of products.

For example, a firm sells cars at a cost of $28,000, and the company paid $250 for tires and $10,000 for other parts. Including all intermediate goods, the car will sell at the price of $28,000 and not by $38,250 ($28,000+ $250+$10,000). Hence, the GDP avoids double counting problem by including only the final values of goods and services.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 7, Problem 1VQP

To determine

Illustrate the example for double counting.

Expert Solution & Answer

Explanation of Solution

Double counting is the problem of estimating the values of goods and services more than once. During the accounting process of GDP, it includes only the final values of goods and services in an economy to avoid the problem of ‘double counting’. That means, the final value of products also includes the intermediate values of products.

For example, a firm sells cars at a cost of $28,000, and the company paid $250 for tires and $10,000 for other parts. Including all intermediate goods, the car will sell at the price of $28,000 and not by $38,250 ($28,000+ $250+$10,000). Hence, the GDP avoids double counting problem by including only the final values of goods and services.

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Answer 4

Question

Chapter 7, Problem 1VQP

To determine

Illustrate the example for double counting.

Expert Solution & Answer

Explanation of Solution

Double counting is the problem of estimating the values of goods and services more than once. During the accounting process of GDP, it includes only the final values of goods and services in an economy to avoid the problem of ‘double counting’. That means, the final value of products also includes the intermediate values of products.

For example, a firm sells cars at a cost of $28,000, and the company paid $250 for tires and $10,000 for other parts. Including all intermediate goods, the car will sell at the price of $28,000 and not by $38,250 ($28,000+ $250+$10,000). Hence, the GDP avoids double counting problem by including only the final values of goods and services.

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Answer 5

Chapter 7, Problem 1VQP

To determine

Illustrate the example for double counting.

Expert Solution & Answer

Explanation of Solution

Double counting is the problem of estimating the values of goods and services more than once. During the accounting process of GDP, it includes only the final values of goods and services in an economy to avoid the problem of ‘double counting’. That means, the final value of products also includes the intermediate values of products.

For example, a firm sells cars at a cost of $28,000, and the company paid $250 for tires and $10,000 for other parts. Including all intermediate goods, the car will sell at the price of $28,000 and not by $38,250 ($28,000+ $250+$10,000). Hence, the GDP avoids double counting problem by including only the final values of goods and services.

Answer 6

Chapter 7, Problem 1VQP

To determine

Illustrate the example for double counting.

Expert Solution & Answer

Explanation of Solution

Double counting is the problem of estimating the values of goods and services more than once. During the accounting process of GDP, it includes only the final values of goods and services in an economy to avoid the problem of ‘double counting’. That means, the final value of products also includes the intermediate values of products.

For example, a firm sells cars at a cost of $28,000, and the company paid $250 for tires and $10,000 for other parts. Including all intermediate goods, the car will sell at the price of $28,000 and not by $38,250 ($28,000+ $250+$10,000). Hence, the GDP avoids double counting problem by including only the final values of goods and services.

Answer 7

Chapter 7, Problem 1VQP

To determine

Illustrate the example for double counting.

Answer 8

Expert Solution & Answer

Explanation of Solution

Double counting is the problem of estimating the values of goods and services more than once. During the accounting process of GDP, it includes only the final values of goods and services in an economy to avoid the problem of ‘double counting’. That means, the final value of products also includes the intermediate values of products.

For example, a firm sells cars at a cost of $28,000, and the company paid $250 for tires and $10,000 for other parts. Including all intermediate goods, the car will sell at the price of $28,000 and not by $38,250 ($28,000+ $250+$10,000). Hence, the GDP avoids double counting problem by including only the final values of goods and services.