Determine the value of intermediate goods produced and sold

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In calculating GDP, we normally exclude intermediate goods produced and used during the period under question. Explain why it is the case that the value of intermediate goods produced and sold during the year is not included directly as part of GDP, but the value of intermediate goods produced and not sold is included directly as part of GDP.

Use the data on U.S. real GDP below to compute real GDP per person for each year. Then use these numbers to compute the percentage increase in real GDP per person from 1987 to 2005.

Year Real GDP (2000 prices) Population
1987 $6,435,000 million 243 million
2005 $11,092,000 million 296.6 million

Reference no: EM13209891

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