Current Account Purchases

Summary of Current Account Purchases

The value of intermediate products in the national production process. An intermediate product is a manufacturing input that has not been converted into a finished product; for example, steel is an intermediate product in the manufacture of an automobile. The value of current account purchases is important as a component in measuring GROSS NATIONAL PRODUCT (read this and related legal terms for further details), which is a tabulation, in terms of dollars, of the national output of goods and useful services during a given time span. The distinction between finished products (inventories) and current account purchases is essential in avoiding an artificial inflation of the gross national product.

(Main Author: William J. Miller)