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One Bag of Flour Is Sold for $1

Question 32

Multiple Choice

One bag of flour is sold for $1.00 to a bakery,which uses the flour to bake bread that is sold for $3.00 to consumers.A second bag of flour is sold for $1 to a grocery store who sells it to a consumer for $2.00.Taking these four transactions into account,what is the effect on GDP?


A) GDP increases by $3.00.
B) GDP increases by $5.00.
C) GDP increases by $6.00.
D) GDP increases by $7.00.

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