Which reason explains why intermediate goods are not included in GDP calculations?

The reason intermediate goods are not included in GDP calculations is that they are used to produce final goods. GDP measures the total market value of all final goods and services produced within a country during a specific period. By including only final goods in the GDP calculation, it avoids double counting that would occur if both intermediate and final goods were included.

Intermediate goods are inputs that manufacturers use to create final products. If intermediate goods were counted in GDP, then the value of the final goods would be inflated since those goods would already incorporate the value of the intermediate goods that were used in their production. This makes it crucial to exclude intermediate goods to maintain an accurate representation of a country's economic output. Thus, the focus on final goods ensures that the GDP reflects only the end products sold to consumers, preventing overlap in value calculations.