Economic Awareness - Sectors of Indian Economy
In the Product Method, which of the following is subtracted to avoid overestimation of national income?
In the Product Method, which of the following is subtracted to avoid overestimation of national income?
medium Q5 of 15
Step-by-Step Solution
Step 1: Understand the Product Method calculation
The Product Method sums value added at each stage, which is output minus intermediate consumption.Step 2: Analyze options
Intermediate consumption is subtracted to avoid double counting of inputs used in production. Net exports, factor incomes, and subsidies are unrelated to this subtraction.Final Answer:
Intermediate consumption → Option AQuick Check:
Intermediate consumption = correct ✅
Quick Trick: Subtract intermediate consumption to get value added.
Common Mistakes:
- Confusing intermediate consumption with factor incomes or subsidies.
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