iPad 4:23 ezto.mheducation.com Hint for quiz, chapter 7 ECO1102[D] Introduction

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iPad 4:23 ezto.mheducation.com Hint for quiz, chapter 7 ECO1102[D] Introduction To Macroeconomics 20181 Chapter 7 MC Quiz ECON 1102: Winter 2018 Ruijin Song Chapter 7 MC Quiz instructions help Question 8 (of 15) Save & Exit Submit 8 The value-added method involves taking the price of intermediate outputs (i.e. outputs that will, in turn, be used in the production of another good) and subtracting the cost of producing each one. In this way, only the value that is added at each step (the sale value minus the value that went into producing it) is summed up. This method gives us the same result as the standard method of only counting the value of final goods and services because Othe only difference is that the value-added method adds up production in the economy as it is produced, and the standard method of counting only uses the completed value at the end of the production chain. both methods are used by the same agency so the totals have to be equal. the system of accounting requires that it be the same. the only difference is that the standard method of counting adds up production in the economy as it is produced, and the value-added method totals the value at the end of the production chain.

Explanation / Answer

Answer is the value-added method production value is added at each step, whereas, in the standard method the value of production is calculated at the end. (First choice)

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