Advertisements
Advertisements
Question
Define the value added approach with example.
Advertisements
Solution
In the value-added approach, the value added by each intermediate good is summed to estimate the value of the final goods. Take an example of a cup of tea which is a final good. The goods used to produce it are – tea powder, milk, and sugar. These things (goods) are ‘intermediate goods’ since they form a part of the final good, i.e., the cup of tea. Each intermediate good the tea powder, milk, and sugar, adds value to the final output, the cup of tea.
APPEARS IN
RELATED QUESTIONS
In India, the GDP is measured both annually and ______.
Write a detailed note on the measurement of GDP.
The intermediate Goods value are indirectly included in the measurement of ______.
The ______ value is derived from the price at which the Goods and Services are sold in the market.
If the ______ goods are included in the GDP, it will result in Double counting.
The first quarter of the GDP estimates includes the months ______.
Adding up all the expenditures incurred in a country during a specific period of time is called ______ method.
GDP measures only the quantity but not ______.
If the total value of goods and services are calculated within the geographical boundary of a country it is called ______.
Explain the limitations of GDP.
