To Calculate Value Added, We Need to Subtract

question 28

Multiple Choice

To calculate value added, we need to subtract

• A) only the cost of domestically produced intermediate inputs.
• B) only the cost of foreign-produced intermediate inputs.
• C) the cost of domestic- and foreign-produced intermediate inputs.
• D) total imports.
• E) the cost of all goods and services exported.

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Definitions:

High-End Fashion

Clothing, accessories, and lifestyle items that are made by leading fashion houses, characterized by exclusivity, luxury materials, and high price points.

Network Effects

The phenomenon whereby a product or service gains additional value as more people use it.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the average cost per unit of output decreases with increasing scale.

Monopolist

A sole provider of a particular good or service in a market, possessing the power to control prices and exclude competition.