Answer :

Double counting is the problem which occurs while calculating Gross Domestic Product (national income). It mainly occurs while calculating the value of final goods and intermediate goods. Intermediate goods are those goods which are used for the production of final goods. Thus they are components of final products. But there is always the possibility of including an intermediate good or service more than once while calculating GDP, where only the value of final goods is to be included. This leads to the problem of double counting and results in the overestimation of national income.


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