Question on: WAEC Economics - 2016
International income accounting, double counting occurs when
A
intermediate goods are counted twice
B
intermediate goods are counted with the final goods
C
final goods are counted more than twice
D
different people count the products
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Correct Option: B
Double counting is an error caused as a result of illogical calculation. This term is used in economics to refer to the faulty practice of counting the value of a nation's goods more than once. Since goods are produced in stages, through specialized channels of production, many intermediate goods are used to produce a final good. If the values of each of these intermediate goods is added together, without subtracting expenditures incurred during the production process, the error of double counting will be committed.
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