Consider the following statements regarding the expenditure methods of measuring national income:
1. Only the value of final goods and services are included in the expenditure method.
2. The sale and purchase of second hand goods are not included in national income.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Question

Consider the following statements regarding the expenditure methods of measuring national income:
1. Only the value of final goods and services are included in the expenditure method.
2. The sale and purchase of second hand goods are not included in national income.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

ONLiNE UPSC · Accepted Answer

Statement 1 is correct : To avoid the problem of &lsquo;double counting&rsquo; in measuring the GDP, only the value of final goods and services are included in the national income.

Statement 2 is correct : The sale and purchase of second hand goods are not included in national income. Because these goods have already been included in national income at the time they were produced. But commission and brokerage paid to facilitate the sale of such goods is a fresh activity and should be included.

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M Question 1	⏱ 0
Consider the following statements regarding the expenditure methods of measuring national income: 1. Only the value of final goods and services are included in the expenditure method. 2. The sale and purchase of second hand goods are not included in national income. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2