Question

If intermediate goods and services were included in GDP
A) the price level may change over time.
B) the GDP would be overstated.
C) the price level rose by more than nominal GDP.
D) All of the above

Answer 1

✨✨(D) is the correct answer ✨✨

Answer 2

The correct answer is option B) the GDP level would be overstated.

GDP is the monetary value of all the final goods and services, that are produced in an economy.

Intermediate goods are either processed into further goods or resold so as to make a ready product for the consumer. So, in the end, there is no such thing left as intermediate goods, as they are converted to final goods, and a non existent material/goods and services are never included in GDP measurement.