Question

6. What is meant by problem of double counting? How this problem can be avoided 7. Elaborate 'economic growth' as objective of government budget. Art. de Economit go 8. According to recent media reports: 'Country A has accused Country B of cur devaluation to promote its exports'. In the light of the given media report commen exports can be promoted through the Currency devaluation? 9. Differentiate between National Income at Current Prices and Nation Constant Prices. Which of the two presents a better view of the economy economy and why? 10. Explain the functions of money. Anne at Current Prices and National Income at 11

Answer 1

Answer 6. The problem of double counting arises due to counting of a value of commodity more than once. In other words, when the same commodity is added more than once in the calculations for national income, the problem of double counting arises. It leads to over estimation of national income.

The problem of double counting cam be avoided by using the 'value added method'. In this method the addition on the value of commodity is added at each step of the production.

Note-According to HOMEWORKLIB RULES first question can be answered.