The value added method of calculating GDP means
A) adding up the market values of all intermediate goods.
B) calculating the percentage changes in the GDP between two years.
C) adding up the incomes of all businesses in a given year.
D) adding up the difference between the sale price and the value of intermediate goods of each product at every stage of production.

Question

Quizplus · Accepted Answer

The value added method of calculating GDP involves adding up the difference between the sale price and the value of intermediate goods of each product at every stage of production. This method takes into account the value that each business or production stage adds to the final product, rather than simply adding up the market values of all intermediate goods or incomes of businesses.

The Value Added Method of Calculating GDP Means