Principles of Macroeconomics / Unit 3 MAC 0209 short lesson, about 20 seconds
Value Added
Captions available
The idea
Value added is the value of a firm's output minus what it bought from other firms. Summing value added across every stage gives the same total as counting final goods.
In practice
Logs, then lumber, then the house: each stage adds its share.
Where people slip
The two methods are alternatives, not additions. Doing both and adding them would double count everything.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Unlocks
- Nothing yet depends on this.
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