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A farmer grows a bushel of wheat and sells it to a miller for $1. The miller turns the wheat into flour and then sells the flour to a baker for $3. The baker uses the flour to make bread and sells the bread to an engineer for $6. The engineer eats the bread. What is the value added by each person? What is the bread's contribution to gdp?

User Lfalkau
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Answer:
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GDP contribution is $6.

Step-by-step explanation: GDP refers to the market value of final goods and services produced withing the national territory of a country.

Using the value added method, we can calculate GDP by summing up the value added at each level of production.


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Or

Using the expenditure approach, GDP is the market value of the final good sold to the customer.

GDP = Cost of bread to the engineer = $6

User Bruno Guarita
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