State any two precautions that must be taken into consideration while estimating national income by value added method.
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The value-added method is a preferred choice of counting used to measure how much a nation has earned over a specific time period.
The two precautions which must be taken when making estimations about the national income using the value-added method are as follows:
a) The transfer payments must not be measured while measuring national income
b) Any illegal money earned through smuggling must also not be included as estimations of such money is not an easy task.
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