Which approach to calculating GDP is especially useful in clarifying the resale of existing goods?
A) The expenditure approach
B) The income approach
C) The value-added approach
D) Any of these measurements will allow that kind of clarification equally well.

Question

Quizplus · Accepted Answer

The value-added approach calculates GDP by summing up the value that each firm adds to its final product. This method is useful in clarifying the resale of existing goods because it only counts the value added at each stage of production, rather than counting the full value of the final product each time it is sold. This means that GDP only increases when new value is added to the economy through production, rather than simply through the resale of existing goods.

Which Approach to Calculating GDP Is Especially Useful in Clarifying