Farmer Bill grows wheat and sells it to the miller for $50,000.The miller turns it into flour and sells it to the bakery for $75,000.The bakery uses the flour in the bread that it sells to people for $90,000.The total contribution to GDP is:
A) $90,000.
B) $75,000.
C) $50,000.
D) $25,000.
E) $215,000.

Question

Quizplus · Accepted Answer

The total contribution to GDP is the final value of goods and services, which is the bread sold to consumers for $90,000. Intermediate transactions (wheat to flour to bread) are not counted separately in GDP to avoid double counting.

Farmer Bill Grows Wheat and Sells It to the Miller