Assertion (A): The sum of value added by all firms equals the value of final goods produced.
Reason (R): Each firm's value added leaves out the inputs it bought, so every input is counted only by the firm that made it.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

In the wheat-flour-bread chain, 100 + 60 + 90 = 250, the price of bread.
R explains why the two totals match.

Concept: Value added and final output
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsValue added method and double counting

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Ten questions from Measuring National Income, at your own pace.

Assertion (A): The sum of value added by all firms equals the value of final goods produced.Reason (R): Each firm's value added leaves out the inputs it bought, so every input is counted only by the firm that made it.

Explanation

Assertion (A): The sum of value added by all firms equals the value of final goods produced.
Reason (R): Each firm's value added leaves out the inputs it bought, so every input is counted only by the firm that made it.