Subtracting the purchase of intermediate products and supplies from the value of the sales of ﬁnal products determines the amount of
A) net investment for a business.
B) proﬁt and cost.
C) value added from the economic activity.
D) surplus or deﬁcit from the economic activity.

Question

Quizplus · Accepted Answer

Subtracting the purchase of intermediate products and supplies from the value of the sales of final products determines the value added from the economic activity. This is because the value added is the difference between the value of the output and the value of the intermediate inputs. It represents the value that has been created by the business through its productive activities. The other options, such as net investment, profit and cost, and surplus or deficit, are not determined solely by this calculation.

Subtracting the Purchase of Intermediate Products and Supplies from the Value