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प्रश्न
What is double counting of national income?
What is meant by double counting?
दीर्घउत्तर
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उत्तर
- One of the major problems involved in the estimation of national income by the value-added method is the problem of double counting. Double counting refers to a situation where the value of a good is taken into account (counted) more than once.
- This is particularly so for intermediate goods. Such a problem occurs because, for every producer, the commodity he sells is the final commodity.
- Thus, if the value of the intermediate good is taken into account every single time, it leads to its estimation more than once: once when it was produced and second as a part of the final good. This leads to overestimation of the value of the final good.
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Notes
Students should refer to the answer according to the question.
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