Double counting can be avoided by
A) including the value of intermediate goods in the current year.
B) not counting the value of intermediate goods in GDP.
C) including the value of intermediate goods in the GNP but not in the GDP.
D) including the value of intermediate goods in the production year but not in the selling year of those goods.

Question

Quizplus · Accepted Answer

Double counting occurs when the value of intermediate goods is included in the calculation of GDP, as they have already been accounted for in the final goods or services. Therefore, not counting the value of intermediate goods in GDP is the best option to avoid double counting. Option A would result in double counting as it includes the value of intermediate goods in the current year. Option C is incorrect as GNP includes all goods and services produced by the country's residents, regardless of the location, so it would not solve the issue of double counting. Option D is also incorrect as it does not address the issue of double counting in the calculation of GDP.

Double Counting Can Be Avoided by