Question

Which expression correctly defines Gross Value Added of firm \[i\]?

Options

• \[\mathrm{GVA}_{i}\equiv V_{i}-A_{i}-Z_{i}\]

• \[\mathrm{GVA}_{i}\equiv Q_{i}+Z_{i}\equiv V_{i}-A_{i}+Z_{i}\]

• \[\mathrm{GVA}_{i}\equiv Q_{i}-Z_{i}\equiv V_{i}+A_{i}-Z_{i}\]

• \[\mathrm{GVA}_{i}\equiv Q_{i}-V_{i}\]

Answer 1

Gross Value Added equals value of output minus intermediate goods used. Since \[Q_i=V_i+A_i\], it can also be written as \[V_i+A_i-Z_i\].