InterviewSolution
Saved Bookmarks
InterviewSolution
| 1. |
(a) Describe value added method. (b) What is double counting ? Name the methods to avoid it. |
|
Answer» (a) Value added method measures the market value of a final goods and services, produced by each producing enterprise, within the domestic territory of the country. `GVA_(MP)=underset((i))(GVO_(MP))-underset((ii))(IC)` Here, (i) Value of output refers to the market value of goods produced in domestic territory during a period of one year. (ii) Intermediate consumption refers to the value of non-factor inputs, which are used up in the process of production. (b) Double counting refers to including value of same products more than once. Two ways to Avoid Double counting : `**" "`Use value of final output, `**" "`Use value added of each firm. |
|