Intermediate goods are goods that are sold to be used to make a final good such as cotton an intermediate good which can be made into clothes which would be a final good. We care about this because you need intermediate goods to make most all final goods and the prices of the intermediate goods help to determine what the price of the final good will be.
GDP is not a good measure of well-being because it only measures the sum of all the final goods produced in a country but only those that are on the market. It also does not show what the effects of a growing population are causing. As well GDP does not look at the effect to the environment with more pollution which can lead to worse living conditions and shorter life expectancies.
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