Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Intermediate goods are not taken into account while calculating national income. Yes or no? Answer with reason.

Options:

Yes, intermediate goods are consumption goods

No, to avoid double counting

Yes, to avoid double counting

No, intermediate goods are considered capital goods

Correct Answer:

Yes, to avoid double counting

Explanation:

The correct answer is Option 3: Yes, to avoid double counting

Intermediate goods are not taken into account while calculating national income to avoid double counting. Including intermediate goods would result in counting the same value multiple times, as the value of intermediate goods is already incorporated into the value of final goods.