International income accounting, double counting occurs when
ECONOMICS
WAEC 2016
International income accounting, double counting occurs when
- A. intermediate goods are counted twice
- B. intermediate goods are counted with the final goods
- C. final goods are counted more than twice
- D. different people count the products
Correct Answer: B. intermediate goods are counted with the final goods
Explanation
Double counting is an error caused as a result of illogical calculation. This term is used in economics to refer to the faulty practice of counting the value of a nation's goods more than once. Since goods are produced in stages, through specialized channels of production, many intermediate goods are used to produce a final good. If the values of each of these intermediate goods is added together, without subtracting expenditures incurred during the production process, the error of double counting will be committed.
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