An intermediate good in contrast has not reached its

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Unformatted text preview: , the hamburger is a final good. You are the final user; no one uses (eats) the hamburger other than you. An intermediate good, in contrast, has not reached its final user. For example, consider the bun that the restaurant buys and on which the hamburger is placed. The bun is an intermediate good at this stage, because it is not yet in the hands of the final user (the person who buys the hamburger). It is in the hands of the people who run the restaurant, who use the bun, along with other goods (lettuce, mustard, hamburger meat), to produce a hamburger for sale. When computing GDP, economists count only final goods and services. If they counted both final and intermediate goods and services, they would be double counting, or counting a good more than once. at $100 each equals $1,000 In our tiny example economy, the only goods produced are computers, cars, and watches. To calculate the GDP, we multiply the quantity of each good by its price, then sum the dollar amounts. Suppose that a book is a final good and that paper and ink are intermediate...
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This document was uploaded on 01/16/2014.

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