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Home Questions ARWU2MJ57T
Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Value added refers to which of the following?

Options:

Production of durable goods.

Value of output - intermediate consumption.

Production of non durable goods.

Expenditure on intermediate goods.

Correct Answer:

Value of output - intermediate consumption.

Explanation:

The correct answer is Option (2) → Value of output - intermediate consumption.

Value added is a key concept in national income accounting. It refers to the net contribution made by a producer at each stage of production. It is calculated as:

Value Added = Value of Output − Intermediate Consumption

Where:

  • Value of output is the total value of goods and services produced.

  • Intermediate consumption includes the value of goods and services used up in the production process.

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