Answer to Question #294127 in Macroeconomics for zee

Question

since GVA equals the total value of output minus intermediaries, during the calculation of gva in food processing industry (eg: bread) in manufacturing sector seperately and in calculation of gva in agriculture eg wheat in primary sector seperately won't there be false calculation of gdp?

Answer 1

According to the output method of GDP estimation, there exists a limitation for valuation, known as double counting. Double counting is the error of overestimation resulting from counting the value of the same product more than once. In our case for example, value of bread measured from food processing industry, and the same from wheat in agriculture.