The value-added approach of measuring GDP does not do the following.
A)It includes the revenue a firm receives from selling a product minus the amount paid for goods purchased from other firms.
B)It includes only the value-added portion from the sale of goods and services.
C)It includes only the second-to-the-last value of the intermediate good used.
D)It avoids double counting.

Question

Quizplus · Accepted Answer

The value-added approach includes the value added at each stage of production, which means only the difference between the value of the output and the value of the intermediate goods used in production is counted. Therefore, it does not include only the second-to-the-last value of the intermediate goods used, as stated in option C. The other options are correct explanations of the value-added approach.

The Value-Added Approach of Measuring GDP Does Not Do the Following