While estimating Gross Domestic Product, the monetary value of only final goods are considered because ___________.
- Its immobility, the active economic flow ends.
- Of the issues of double-counting
- The value added at each stage of the production process is included
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Only b.
While estimating Gross Domestic Product (GDP), only the monetary value of final goods is considered to avoid the issues of double counting. If intermediate goods used in production were also counted, their value would be recorded multiple times—once when sold as inputs and again when sold as part of the final product, leading to an inflated GDP figure. By including only final goods, GDP reflects the actual value of goods and services produced in the economy without duplication, ensuring an accurate measurement of national income.