National income intermediate consumption

Question

My economics teacher said that amount paid by a business firm to a lawyer for hiring his services is intermediate consumption hence it should not be included but my question is why it is intermediate consumption ?

csilvia · Answer

Because by definition it is. Intermediate consumption:

Intermediate consumption is a national accounts concept which measures the value of the goods and services consumed as inputs by a process of production

firms hire lawyers as part of their business so it is part of the production.

National income intermediate consumption

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