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The value-added method involves taking the cost of intermediate outputs (i.e.,

outputs that will, in turn, be used in the production of another good) and subtracting that cost from the value of the good being produced. In this way, only the value that is added at each step (the sale value minus the value of the intermediate goods 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:

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The method of value-added of calculating GDP provides same result as a standard... View the full answer

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