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Why are intermediate goods excluded when national income is measured using the value of final goods and services?

Answer and explanation

Correct answer: To avoid double counting

Intermediate goods are used to produce other goods. If their full value and the full value of the final product were both counted, part of the same production value would be counted more than once. Counting final goods, or adding value added at each production stage, avoids this double counting.

Related tags

National IncomeIntermediate GoodsGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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