Macroeconomic principles: Avoidance of double counting
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2.2 Avoidance of double counting
It is important to keep in mind that final goods and services are finished products that are produced in a given year. For example, a fully manufactured automobile is a final good. The products that are used to manufacture final goods are called intermediate parts or inputs and are not counted; all of the resources or inputs that are used to manufacture an automobile are only counted as one completed product. If the intermediate parts are counted as well as the final good, it is known as double counting; this can diminish the accuracy of the GDP measurement.
