Economic Awareness - Sectors of Indian Economy
Which of the following is TRUE about intermediate goods in the Value Added Approach?
Which of the following is TRUE about intermediate goods in the Value Added Approach?
medium Q7 of 15
Step-by-Step Solution
Step 1: Define intermediate goods in Value Added Approach
Intermediate goods are inputs used up in production and should not be counted multiple times.Step 2: Role in value added calculation
They are subtracted from output to calculate value added at each stage, avoiding double counting. They are not included fully, counted only at final stage, or completely ignored.Final Answer:
They are subtracted from output to calculate value added at each stage → Option BQuick Check:
Intermediate goods = subtracted from output to find value added ✅
Quick Trick: Subtract intermediate goods value to avoid double counting.
Common Mistakes:
- Assuming intermediate goods are counted once or ignored entirely.
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