IGNOU BECM 162 2025 2026 - With an example, explain the concept of double counting.

Question

With an example, explain the concept of double counting.

02 Mar 2026

Answer :

Word Count : 304

Double counting is a problem in national income accounting that arises when the value of the same good or service is counted more than once while estimating the total output of an economy. This leads to an overestimation of national income and gives a misleading picture of economic performance. To avoid double counting, economists use the concept of value added, which measures only the additional value created at each stage of production. Consider a simple example of a bread-making process. Suppose a

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