PRC-3 · Chapter 13 · Question 35 of 50
If the sale value of final goods by firms is Rs. 45 billion, and they purchased Rs. 10 billion worth of intermediate materials from outside firms to make them. Using the value-added approach, what is the GDP contribution?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 35 billion
Explanation
The value-added approach subtracts the cost of intermediate inputs from the final sales value to prevent double counting (45 - 10 = 35 billion).
More National Income and Its Determination MCQs
- Q37If a country's Nominal GDP grows by 10% in a year, but the general price level (inflation) also rises by exactly 10%, what has happened to…
- Q38Which of the following events would cause an economy's Aggregate Demand (AD) curve to definitively shift to the right?
- Q39According to Keynesian macroeconomic theory, when an economy reaches its absolute physical limit of full employment, its Long-Run…
- Q40When the aggregate demand curve shifts to the right along the perfectly vertical section of the LRAS curve, what is the sole macroeconomic…
- Q41If an economy's aggregate spending line intersects the 45-degree line at an output level far to the left of the full-employment potential…