Why does only final goods and services are included while calculating National Income?
Only final goods and services are included while calculating National Income because:
(a) Final goods are those goods which have crossed the boundary line of production and are ready for final consumption and investment.
(b) The value of final goods already includes the value of all the intermediate goods that are used in making the final goods. This would lead to the problem of double counting if all the goods of the economy will be included while calculating national income.
(c) This should be avoided because if the value of any commodity is counted more than once it will result in overestimation of national income.
