Question

What precaution should be taken in calculating GDP?

Answer 1

The precaution that should be taken in calculating GDP is that the value of intermediate goods should not be included. This is because the value of final goods already includes the value of intermediate goods, and including both would lead to double counting. Hence, GDP is calculated as the sum of production of final goods and services in the three sectors, excluding intermediate goods to avoid overestimation of the total production value.