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How does it get cancelled out? Take this example: Company A has $1M revenue from creating services or products. Then my company B invoices company A for $250K.
by kornhole 4y ago
How does it get cancelled out? Take this example: Company A has $1M revenue from creating services or products. Then my company B invoices company A for $250K. GDP is $1.25M. I do not report who I billed to the government who compiles GDP. So I don't see how they can not include my services as part of GDP.
- ummonk 4y agoCompany A reports $250K in non-employee-compensation expenses to the government. This intermediate consumption gets removed from their share of the GDP, so the total is ($1M-$250K) + $250K = $1M.