Question

Which formula gives GDP by the Value Added Method?

Options

• \[\mathrm{GDP}\equiv\sum_{i=1}^{N}\mathrm{GVA}_{i}\]

• \[\mathrm{GDP}\equiv\sum_{i=1}^{N}\mathrm{Z}_{i}\]

• \[\mathrm{GDP}\equiv\mathrm{V}_{i}-\mathrm{A}_{i}\]

• \[\mathrm{GDP}\equiv\mathrm{GVA}-\mathrm{Depreciation}\]

Answer 1

GDP by the Value Added Method is the sum of Gross Value Added of all firms. The summation runs from firm \[i=1\] to \[N\].