Advertisements
Advertisements
Questions
State with reason, whether you agree or disagree with the following statement:
Under the output method, the value-added approach is used to avoid double counting.
State with reason whether you agree or disagree with the following statement:
The value-added approach is used under the output method to avoid double counting.
Options
Agree
Disagree
MCQ
True or False
Solution
I agree with the above statement.
Reason:
- Double counting occurs when the costs of intermediate goods used by a business to produce finished good are included in the computation of a nation's GDP.
- According to the value-added approach, value-added at each stage of the production process is included while calculating national income.
- Value-added = Value of final output - Value of input.
- GNP is obtained by adding the values added by the different stages of the production process till the final output is reached in the hands of consumers.
- The calculation in such a manner ensures that the costs of all intermediate goods are counted only once.
shaalaa.com
Is there an error in this question or solution?
RELATED QUESTIONS
Complete the correlation.
Output method : Product method :: ______ : Factor cost method.
State with reason whether you agree or disagree with the following statement:
Precautions are to be taken while using the product method of measuring national income.
Study the following table and answer the questions:
| Production Stage | Value of Input (₹) | Value added (₹) | Value of Output (₹) |
| Sugar cane (Farmer) | 0 | 25 | 25 |
| Sugar (Manufacturer) | `square` | 15 | 40 |
| Retailer | 40 | `square` | 50 |
| Total Value | `square` |
Questions:
- How much is the value of input for a manufacturer?
- How much value is added by the retailer?
- How much is the final value of the product?
- Which method of measuring national income is represented by the above table?
