What is the solution to the problem of double counting in the estimati

1.	What is the solution to the problem of double counting in the estimation of national income?
Answer» 1. The value obtained is actually the GNP at market prices. Care must be taken to avoid double counting. 2. The value of the final product is derived by the summation of all the values added in the productive process. 3. To avoid double counting, either the value of the final output should be taken into the estimate of GNP or the sum of values added should be taken. 4. Double counting is to be avoided under value added method. 5. Any commodity which is either raw material or intermediate good for the final production should not be included. 6. For example, value of cotton enters value of yam as cost, and value of yam in cloth and that of cloth in garments. 7. At every stage value added only should be calculated.

What is the solution to the problem of double counting in the estimation of national income?

Answer»

1. The value obtained is actually the GNP at market prices. Care must be taken to avoid double counting.

2. The value of the final product is derived by the summation of all the values added in the productive process.

3. To avoid double counting, either the value of the final output should be taken into the estimate of GNP or the sum of values added should be taken.

4. Double counting is to be avoided under value added method.

5. Any commodity which is either raw material or intermediate good for the final production should not be included.

6. For example, value of cotton enters value of yam as cost, and value of yam in cloth and that of cloth in garments.

7. At every stage value added only should be calculated.

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