Question

“ Only final goods and services are included while calculating National Income”- Examine.​

Answer 1

Answer:

Only final goods and services are included while calculating National Income.

Explanation:

This is done to prevent the mistake of multiple counting.

When value of final goods and services is being calculated, the value of intermediate goods which are used up in production of final goods and services, is already included.

So, if we include the value of intermediate goods too in the final value, we would be counting the value of same product twice.

thus, the value of only final goods and services is counted in the National Income.