Question

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6. Why are only 'final goods and services' counted while computing the total
production?
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Answer 1

Answer:

Only final goods and services are counted, to avoid multiple counting, since their prices covers the cost of all intermediate products and services that were used to produce the final output. Another way to calculate GDP is to measure the value added to each product or service at each stage of its production

Explanation:

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Answer 2

Answer:

Only final goods and services are counted while productions because the value fo final goods and services already includes the value of intermediate products as the intermediate products are used up in producing the final goods.

Eg: For making biscuits,a farmer sells flour mill at Rs 8/kg. The mill grinds the wheat and sells the flour to a biscuit company for Rs 10/kg. The biscuit company uses the flour and things like sugar and oil to make four packets of biscuits. It sells the biscuits in the market for Rs 60/kg

Hence the value of Rs 60 for the biscuits already includes value of flour(Rs 10) and all other intermediate goods.