Value added refers to:
A)any increase in GDP which has been adjusted for adverse environmental effects.
B)the excess of gross investment over net investment.
C)the difference between the value of a firm's output and the value of the inputs it has purchased from others.
D)the portion of any increase in GDP which is caused by inflation as opposed to an increase in real output.

Question

Quizplus · Accepted Answer

Value added refers to the difference between the value of a firm's output (i.e. its sales revenue) and the value of the inputs (e.g. raw materials, labor, etc.) it has purchased from others. This is because the value of a firm's output already includes the value of the inputs used to produce it, so the value added represents the contribution of the firm's own production process to the economy.

Value Added Refers To