The sum of the value added by all firms equals total
A) profits.
B) spending on capital goods.
C) private-sector investment.
D) after-tax revenue.
E) value of final goods and services.

Question

Quizplus · Accepted Answer

The value added by all firms is the sum of the value of final goods and services produced by each firm. This is because value added is the difference between the value of a firm's output and the value of the intermediate inputs used in producing that output. Therefore, the sum of the value added by all firms equals the value of final goods and services produced in the economy.

The Sum of the Value Added by All Firms Equals