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What are the reasons that we include final goods only while measuring the final value of Economic activity of a country and not the intermediary goods?
1. Final goods already includes the value of the intermediate goods that have entered into their production as inputs
2. Counting them separately will lead to the error of double counting
3. Counting them will highly exaggerate the final value of our economic activity
Which of these statements are not correct?
- a)1 Only
- b)2 Only
- c)3 Only
- d)None of them
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
What are the reasons that we include final goods only while measuring...
The correct answer is option 'D' - None of them.
Explanation:
1. Final goods already include the value of the intermediate goods that have entered into their production as inputs:
- This statement is correct. When we calculate the value of final goods, it already takes into account the value of intermediate goods that were used in their production. Including the value of intermediate goods separately would result in double counting, which would distort the actual value of economic activity.
2. Counting them separately will lead to the error of double counting:
- This statement is correct. If we were to count the value of intermediate goods separately, it would result in double counting. Intermediate goods are used in the production process and their value is already included in the final goods. Counting them separately would artificially inflate the value of economic activity.
3. Counting them will highly exaggerate the final value of our economic activity:
- This statement is incorrect. Counting the value of intermediate goods separately would not exaggerate the final value of economic activity. On the contrary, it would lead to an overestimation of economic activity due to double counting. Including the value of intermediate goods separately would result in an inflated GDP, which would not accurately reflect the true economic output of a country.
In conclusion, both statements 1 and 2 are correct, while statement 3 is incorrect. Final goods already include the value of intermediate goods, counting them separately would result in double counting and an overestimation of economic activity. Therefore, the inclusion of only final goods is necessary to measure the accurate value of economic activity in a country.
Explanation:
1. Final goods already include the value of the intermediate goods that have entered into their production as inputs:
- This statement is correct. When we calculate the value of final goods, it already takes into account the value of intermediate goods that were used in their production. Including the value of intermediate goods separately would result in double counting, which would distort the actual value of economic activity.
2. Counting them separately will lead to the error of double counting:
- This statement is correct. If we were to count the value of intermediate goods separately, it would result in double counting. Intermediate goods are used in the production process and their value is already included in the final goods. Counting them separately would artificially inflate the value of economic activity.
3. Counting them will highly exaggerate the final value of our economic activity:
- This statement is incorrect. Counting the value of intermediate goods separately would not exaggerate the final value of economic activity. On the contrary, it would lead to an overestimation of economic activity due to double counting. Including the value of intermediate goods separately would result in an inflated GDP, which would not accurately reflect the true economic output of a country.
In conclusion, both statements 1 and 2 are correct, while statement 3 is incorrect. Final goods already include the value of intermediate goods, counting them separately would result in double counting and an overestimation of economic activity. Therefore, the inclusion of only final goods is necessary to measure the accurate value of economic activity in a country.
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What are the reasons that we include final goods only while measuring...
- Intermediate goods are crucial inputs to any production process and a significant part of our manpower and capital stock are engaged in production of these goods. However, since we are dealing with the value of output, we should realise that the value of the final goods already includes the value of the intermediate goods that have entered into their production as inputs.
- Counting them separately will lead to the error of double counting. Whereas considering intermediate goods may give a fuller description of total economic activity, counting them will highly exaggerate the final value of our economic activity
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What are the reasons that we include final goods only while measuring the final value of Economic activity of a country and not the intermediary goods?1. Final goods already includes the value of the intermediate goods that have entered into their production as inputs2. Counting them separately will lead to the error of double counting3. Counting them will highly exaggerate the final value of our economic activityWhich of these statements are not correct?a) 1 Onlyb) 2 Onlyc) 3 Onlyd) None of themCorrect answer is option 'D'. Can you explain this answer?
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What are the reasons that we include final goods only while measuring the final value of Economic activity of a country and not the intermediary goods?1. Final goods already includes the value of the intermediate goods that have entered into their production as inputs2. Counting them separately will lead to the error of double counting3. Counting them will highly exaggerate the final value of our economic activityWhich of these statements are not correct?a) 1 Onlyb) 2 Onlyc) 3 Onlyd) None of themCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about What are the reasons that we include final goods only while measuring the final value of Economic activity of a country and not the intermediary goods?1. Final goods already includes the value of the intermediate goods that have entered into their production as inputs2. Counting them separately will lead to the error of double counting3. Counting them will highly exaggerate the final value of our economic activityWhich of these statements are not correct?a) 1 Onlyb) 2 Onlyc) 3 Onlyd) None of themCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What are the reasons that we include final goods only while measuring the final value of Economic activity of a country and not the intermediary goods?1. Final goods already includes the value of the intermediate goods that have entered into their production as inputs2. Counting them separately will lead to the error of double counting3. Counting them will highly exaggerate the final value of our economic activityWhich of these statements are not correct?a) 1 Onlyb) 2 Onlyc) 3 Onlyd) None of themCorrect answer is option 'D'. Can you explain this answer?.
What are the reasons that we include final goods only while measuring the final value of Economic activity of a country and not the intermediary goods?1. Final goods already includes the value of the intermediate goods that have entered into their production as inputs2. Counting them separately will lead to the error of double counting3. Counting them will highly exaggerate the final value of our economic activityWhich of these statements are not correct?a) 1 Onlyb) 2 Onlyc) 3 Onlyd) None of themCorrect answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about What are the reasons that we include final goods only while measuring the final value of Economic activity of a country and not the intermediary goods?1. Final goods already includes the value of the intermediate goods that have entered into their production as inputs2. Counting them separately will lead to the error of double counting3. Counting them will highly exaggerate the final value of our economic activityWhich of these statements are not correct?a) 1 Onlyb) 2 Onlyc) 3 Onlyd) None of themCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What are the reasons that we include final goods only while measuring the final value of Economic activity of a country and not the intermediary goods?1. Final goods already includes the value of the intermediate goods that have entered into their production as inputs2. Counting them separately will lead to the error of double counting3. Counting them will highly exaggerate the final value of our economic activityWhich of these statements are not correct?a) 1 Onlyb) 2 Onlyc) 3 Onlyd) None of themCorrect answer is option 'D'. Can you explain this answer?.
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