DO SOME METHODS OF CALCULATING GDP LEAD TO THE POSSIBILITY OFDOUBLE - ProProfs Discuss
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Do some methods of calculating GDP lead to the possibility ofdouble counting production?



Asked by Christian, Last updated: Nov 23, 2021

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John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

Double counting is excluded from gdp calculations. if i sold a computer for $100 andmy cost of goods sold (cogs) and other expenses reduce my revenue to a netincome of $50, gdp would count the $50 income. out of my expenses, lets say i paidthe chip manufacturer $10. in other words, the chip manufacturer sold chips at $10.lets say their cogs and other expenses reduce their revenue to $3 in net income.gdp would count the $3. you can go on and on with the analysis - the expenses thatthe chip manufacturer paid are considered revenue to other suppliers, etc., and each ofthem in turn has an income to report and expenses that are paid, etc. in this way, allproducts are counted - the computer, the chips, and everything else that created anincome and all accounted for without double counting production.
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