Which of the following over estimates the value of national income?

Assessment: WAEC SSCE - Economics - 2010 (Objective) Subject: Economics

Question 1 Report

Which of the following over estimates the value of national income?

Answer Details
Double counting overestimates the value of national income. Double counting occurs when the value of an intermediate good is included in the value of the final good. It leads to an overestimation of the national income as the value of the intermediate good is counted more than once. For example, if the value of the car is included in both the value of the tires and the value of the car, it leads to double counting and an overestimation of national income.
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Read lesson note on National Income (JAMB)
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