Assume that a bakery hires more workers and pays them wages and that the workers produce more bread. GDP increases in all of the following cases except when the bread:
A) is sold to households.
B) is stored away for later sale.
C) grows stale and is thrown away.
D) is sold to other firms.

Question

Quizplus · Accepted Answer

When the bread grows stale and is thrown away, it represents a loss of production and value. This reduces GDP. In all other cases, the additional production and sales of bread increase GDP.

Assume That a Bakery Hires More Workers and Pays Them