The Value-Added Approach of Calculating GDP

question 136

Multiple Choice

The value-added approach of calculating GDP:

• A) is an alternative, and equally valid, way of avoiding the problem of double-counting.
• B) lets us break down the total value paid and see how much of it was created at each step of the production process.
• C) is especially useful when thinking about services involved in the resale of existing goods.
• D) All of these are correct.

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Definitions:

Negotiates

The process of discussing something to reach an agreement, especially in a business or political context.

Sue

To initiate legal proceedings against a person or entity.

Loan

A sum of money borrowed from a lender that is expected to be paid back with interest.

Materially Altered

Refers to significant modifications made to a document or object that change its original condition or purpose.