Question

Inclusion of value of intermediate goods leads to double counting. (State whether the statement is TRUE or FALSE)

Answer 1

the statement is true.

thanks

Answer 2

“Inclusion of the value of intermediate goods leads to double counting” is a TRUE statement.

EXPLANATION:

Double counting is an error and it included the counting the ‘value of goods’ two times. When the goods are manufactured, then many forms of intermediate goods, are used for producing the final good.  

While counting we take into account the value of each of these intermediate goods without removing or subtracting the expenditure which has taken place during the manufacturing of these goods. This leads to the error of double counting the goods.