Value added refers to the increase in the market value of a product that takes place at each stage of the production process, from raw materials to finished product. It is calculated by subtracting the cost of intermediate goods from the value of the final product. This is an important concept in measuring the contribution of different sectors of the economy to overall GDP.

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Value Added Is the

Question 39

Multiple Choice

Value added is the

A) Addition to GDP because nonmarket activities are captured.
B) Increase in market value of a product that takes place at each stage of the production process.
C) Difference between nominal GDP and real GDP.
D) Impact on third parties caused by market activities.

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