A farmer sells wheat to a miller for $100. The miller makes the wheat into flour and sells it to a baker for $200. The baker makes the wheat into bread and sells it to a grocer for $300. The grocer sells the bread to the public for $400. The effect on GDP is:

Question

Quizplus · Accepted Answer

GDP increases by the final sale value of the bread, which is $400, as it represents the market value of all final goods and services produced.

A Farmer Sells Wheat to a Miller for $100