Question 21
HardOriginal questionA bakery buys flour worth ₹30 and sells bread worth ₹50 to households. A farmer sold the wheat for that flour to a mill for ₹18. If GDP is found by adding the value of all three sales, it is overstated by
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
Adding all sales: 18 + 30 + 50 = ₹98.
The true value of final output is the bread, ₹50. So the overstatement is 98 − 50 = ₹48, the wheat and flour counted again.
- Concept
- Double counting
- Typical timeTypical
- 100 s
- Your timeYours
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