Calculating the the value of an economy by adding up the value of every good and service produced would lead to overcounting as the value of intermediate goods would be counted twice.
What is gross domestic product?
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Intermediate goods are goods that are used in the production of goods and services. For example, flour that is used in the production of bread is an example of intermediate goods. It is not included in the calculation of gross domestic product.
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