The farmer pays $0.2 for the seed that is sold to the miller for $0.45; the miller makes flour and sells it to the baker for $0.55. The baker makes bread and sells it to the grocery store for $0.8 and the store sells it to consumers for $1.20. Gross Domestic Product (GDP) is

Question

Quizplus · Accepted Answer

GDP is the value of all final goods and services produced within a country's borders in a given period of time. In this scenario, the final good is bread sold to the consumers for $1.20. The value of the seed, flour, and bread at each stage of production is not counted as part of GDP because they're intermediate goods. Therefore, only the value of the final good, which is $1.20, is included in GDP.

The Farmer Pays $0