Double counting can be avoided when computing GDP by:
A) simply deducting a double-counting factor from the GDP estimates.
B) adding the value of only the intermediate (non-final) goods and services produced.
C) adding only the value contributed by firms at each stage of production.
D) including the value of all output produced in the economy.

Question

Quizplus · Accepted Answer

Double counting is avoided by adding only the value added by firms at each stage of production, rather than the total value of all goods produced. This method ensures that the value of intermediate goods, which are used in the production of final goods, is not counted multiple times.

Double Counting Can Be Avoided When Computing GDP By