Assume that a rancher sells McDonald's a quarter-pound of meat for $1 and that McDonald's sells you a hamburger made from that meat for $2. In this case, GDP increases by:
A)$0.50.
B)$1.
C)$2.
D)$3.

Question

Quizplus · Accepted Answer

GDP increases by the final sale price of the hamburger, which is $2. The intermediate transaction of the rancher selling meat to McDonald's is not counted separately in GDP to avoid double counting.

Assume That a Rancher Sells McDonald's a Quarter-Pound of Meat