PRC-3 · Chapter 13 · Question 27 of 50
A farmer sells wheat for Rs. 50. A miller turns it into flour and sells it for Rs. 80. A baker makes bread and sells it for Rs. 120. To avoid the massive error of 'double counting', statisticians use the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Value-added approach
Explanation
To prevent counting the wheat three times, statisticians only count the 'value added' at each intermediate stage of production (50 + 30 + 40 = 120).
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