Chapter 13.1, Problem 4R

To determine

To state: The meaning of double counting and the way by which economists avoid double counting in calculating GDP.

Explanation of Solution

An illogical error which happens due to some illogical calculation is termed as double counting. In case of calculating GDP, double counting is that practice where the value of goods of a nation is counted more than once by fault.

Economists should add only the final value of the goods and services while measuring the performance of an economy to avoid double counting.

Economics Concept Introduction

Introduction:

Gross domestic product- The value of gross domestic product tells the amount of goods and services that are available within the borders of a country. The importance of GDP is that give information about the size of economy and the performance of economy.