Problems of Output Method

  • It is difficult to get relevant and reliable information about the total output of a country.
  • Problem of double counting arises due to the difficulty in distinguishing between final and intermediate goods like in the case of simsim.
  • Problem of inventories arises i.e. goods produced but not used immediately. Some goods are produced within the course of the year but are sold in the following year. The problem arises because it is not clear at what price should such a good be valued.
  • It is difficult to determine the size of subsistence production.
Valuation of government output is difficult.
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