Practicing Success
In case, value of intermediate goods are included during the estimation of national product, which problem will arise ? |
Problem of Double counting Problem of Inclusion Problem of Scarcity Problem of estimation of National Income |
Problem of Double counting |
The correct answer is option (1) : Problem of Double counting Including intermediate goods would lead to double counting, where the value of goods is counted multiple times in the GDP calculation process. This overestimates the true value added in production and distorts the accuracy of the GDP figure as a measure of economic output. |