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Assume the production of a good involves four stages of production. If the final retail price...

Assume the production of a good involves four stages of production. If the final retail price of this good is $20, it must be the case that summing the "value added" for all stages of production will equal:

a. $4

b. $5

c. $80

d. $20

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Answer #1

GDP is the sum of value added at each stage of production.

If production of goods involves four stages of production and the final retail price of this good is $20, it means the GDP is $20.

And it must be the case that summing the value added for all stages of production will equal to $20.

Answer: option (d).

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