Question

State the various precautions of the product method that should be kept in mind while estimating national income.

Answer 1

Precautions of the Product Method :

(i) Sale and purchase of second-hand goods is not to be included.

(ii) The value of intermediate goods is not to be included as it may lead to double counting.

(iii) Production for self-consumption should be included.

(iv) Value of services rendered by house-wives/ family members is not to be included.

(v) Production from illegal activities is not to be included.