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* Difficulties in measuring Gross Domestic Product
GDP is widely used by economists to follow how the economy is moving, as its variations are relative quickly identified. However, its very difficult to measure GDP. The problems include:
• Determination of intermediate & final goods is difficult. A final good or service is the end product of a process, the product or service that consumers actually use. On the other hand, goods produced on the way to making the final product are called intermediate goods. In the example of making bread, if the grain, the flour and the bread were all counted, the grain would end up being counted three times, which would lead to an overstatement of GDP...
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