Value added in national income accounts refers to the:
A) value added by labor to the production process.
B) difference between the price and the value of inputs purchased.
C) difference in profits at various stages of production.
D) value of all inputs used by the final producer.

Question

Quizplus · Accepted Answer

Value added in national income accounts refers to the difference between the price at which goods are sold and the cost of the inputs purchased to make those goods. This concept captures the additional value created at each stage of production, excluding the cost of raw materials and intermediate goods to avoid double counting in the calculation of GDP.

Value Added in National Income Accounts Refers to The