<blockquote>
<p>Therefore, a company X that only sells car parts to car brands like Mercedes for example, will not &quot;directly&quot; impact GDP at all right?</p>
</blockquote>
<p>Correct.</p>
<blockquote>
<p>The part of GDP that X produces is entirely contained in the GDP of the companies that sell the final good (car), right ?</p>
</blockquote>
<p>Correct.</p>
<blockquote>
<p>Also, I dont understand why GDP doesn't take used goods into account. If I buy a computer for 100\$ and resell it for 1000\$, there is a huge profit that does not appear in GDP which makes me feel uncomfortable with this notion. What if I own a resell company that buys used goods and resell them ? It does not contribute to GDP at all then ?</p>
</blockquote>
<p>This is not accurate.</p>
<p>First, no sale in the grey or black market is recorded on GDP. Even if you create new art and sell it on Facebook it won’t enter GDP if you don’t sell it through business and keep accounting record. This is one of the drawbacks of GDP but there isn’t really any good practical way to record gray and black activity, because by definition it’s hidden from the government.</p>
<p>Second hand sales in a second hand stores are however recorded in GDP. If company buys old PC and refurbishes it then the value added will be included in GDP. This counts as new production to which the old laptop is input.</p>
<p><strong>Answer to Question in Edit</strong></p>
<blockquote>
<p>What about a sponge that a cleaner buys to clean someone's house. Is it a final good or an intermediate good that will be counted on the salary of the cleaner ?</p>
</blockquote>
<p>It is intermediate good if we talk about cleaner who has legal cleaning business.  It is final good (only from GDP calculation perspective of course) if we talk about gray activity (e.g. some teen earning extra money by going door to door and offering cleaning services etc).</p>

CC BY-SA 4.0
2023-10-21T14:25:54.470Z
2023-10-21T14:31:05.180Z
2023-10-21T14:31:05.180Z
1muflon1
<p>I am new to macroeconomics and I had some questions about GDP when we say that it does not take into account intermediate goods. Therefore, a company X that only sells car parts to car brands like Mercedes for example, will not &quot;directly&quot; impact GDP at all right ? The part of GDP that X produces is entirely contained in the GDP of the companies that sell the final good (car), right ? What about a sponge that a cleaner buys to clean someone's house. Is it an final good or an intermediate good that will be counted on the salary of the cleaner ?</p>
<p>Also, I dont understand why GDP doesn't take used goods into account. If I buy a computer for 100$ and resell it for 1000\$, there is a huge profit that does not appear in GDP which makes me feel uncomfortable with this notion. What if I own a resell company that buys used goods and resell them ? It does not contribute to GDP at all then ?</p>

<macroeconomics><gdp>
Intermediate/used goods and GDP
Kilkik
# Intermediate/used goods and GDP

(Asked by: username_0 on 2023-10-21)

I am new to macroeconomics and I had some questions about GDP when we say that it does not take into account intermediate goods. Therefore, a company X that only sells car parts to car brands like Mercedes for example, will not "directly" impact GDP at all right ? The part of GDP that X produces is entirely contained in the GDP of the companies that sell the final good (car), right ? What about a sponge that a cleaner buys to clean someone's house. Is it an final good or an intermediate good that will be counted on the salary of the cleaner ?

Also, I dont understand why GDP doesn't take used goods into account. If I buy a computer for 100$ and resell it for 1000\$, there is a huge profit that does not appear in GDP which makes me feel uncomfortable with this notion. What if I own a resell company that buys used goods and resell them ? It does not contribute to GDP at all then ?

**Tags:** macroeconomics, gdp

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## 1 answers

### Answer by username_1 on 2023-10-21. Score: 1 | Accepted answer

> Therefore, a company X that only sells car parts to car brands like Mercedes for example, will not "directly" impact GDP at all right?

Correct.

> The part of GDP that X produces is entirely contained in the GDP of the companies that sell the final good (car), right ?

Correct.

> Also, I dont understand why GDP doesn't take used goods into account. If I buy a computer for 100\$ and resell it for 1000\$, there is a huge profit that does not appear in GDP which makes me feel uncomfortable with this notion. What if I own a resell company that buys used goods and resell them ? It does not contribute to GDP at all then ?

This is not accurate.

First, no sale in the grey or black market is recorded on GDP. Even if you create new art and sell it on Facebook it won’t enter GDP if you don’t sell it through business and keep accounting record. This is one of the drawbacks of GDP but there isn’t really any good practical way to record gray and black activity, because by definition it’s hidden from the government.

Second hand sales in a second hand stores are however recorded in GDP. If company buys old PC and refurbishes it then the value added will be included in GDP. This counts as new production to which the old laptop is input.

**Answer to Question in Edit**

> What about a sponge that a cleaner buys to clean someone's house. Is it a final good or an intermediate good that will be counted on the salary of the cleaner ?

It is intermediate good if we talk about cleaner who has legal cleaning business. It is final good (only from GDP calculation perspective of course) if we talk about gray activity (e.g. some teen earning extra money by going door to door and offering cleaning services etc).


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