Question

To avoid double counting we deduct the value of ________.

• A. final goods
• B. intermediate goods
• C. raw material
• D. none of the above

Answer 1

Answer: (B)

intermediate goods

Intermediate goods are those goods which are partly finished and are used in the process of production of another goods.

As the intermediate goods are used again in the production of another good, counting the value of these goods may result in double counting. That is why value of intermediate goods are not taken while calculating national income.