Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Product method | (I) | Sum of final expenditure, the phase of disposition |
| (B) | Expenditure method | (II) | Counting the value of intermediate goods twice |
| (C) | Income method | (III) | Sum of value added, the phase of production |
| (D) | Double counting | (IV) | Sum of factor incomes, the phase of distribution |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) - (III), (B) - (I), (C) - (IV), (D) - (II)
GDP can be measured at three phases, and each method adds a different flow.
| List-I | List-II | Reason |
|---|---|---|
| (A) Product method | (III) Sum of value added, the phase of production | The value added method measures GDP in the phase of production. |
| (B) Expenditure method | (I) Sum of final expenditure, the phase of disposition | Adding final expenditure measures GDP in the phase of disposition. |
| (C) Income method | (IV) Sum of factor incomes, the phase of distribution | Adding factor incomes measures GDP in the phase of distribution. |
| (D) Double counting | (II) Counting the value of intermediate goods twice | Counting intermediate goods separately is the error of double counting. |
NCERT (2026-27): “2.2.3 Income Method 1. GDP in the phase of production or the value added method: Recall that value added (VA) = Sales – Intermediate Goods …” “2.2.3 Income Method 2. GDP in the phase of disposition or the expenditure method: Recall that GDP = Sum of final expenditure or expenditures on goods and services for end use. …” “2.2.3 Income Method 3. GDP in the phase of distribution or Income method …” “2.1 Some Basic Concepts of Macroeconomics … However, since we are dealing with value of output, we should realise that the value of the final goods already includes the value of the intermediate goods that have entered into their production as inputs. Counting them separately will lead to the error of double counting. …” |