Question

Product method precatuions

Answer 1

Answer:

Precautions of Product Method:

• Avoid double counting.
• Production for self consumption should be included.
• Sale of second hand goods is not to be included.
• Production from illegal activities is not to be included.
• Value of services rendered by housewives/family members is not to be included.

Product Method – is a method for the measurement of national income. In this method, the net value of all final goods and services produced in a country during a year is obtained and the total obtained value is called Gross Domestic Product.