Q. In the Product Method of calculating national income, the term ‘Value Added’ refers to:
Quarterly-SFG-Jan-to-March
Red Book

[A] Total value of goods produced by firms without any deductions.

[B] Total sales revenue of firms.

[C] Value of output minus the value of intermediate goods used.

[D] Total factor payments made by the firms.

Answer: C
Notes:

Explanation:

  • Value Added is the net contribution made by a firm.
  • It is calculated as:
    ➔ Value Added = Value of Output – Value of Intermediate Goods.
  • This helps avoid double-counting in national income calculation.

Source- 12th NCERT: Economics: Macroeconomics

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