The sale of one loaf of bread adds $2.65 to GDP. The Option B.
The Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders.
In this scenario, the loaf of bread goes through multiple stages of production, starting with the farmer's wheat, then the miller's flour, followed by the baker's bread, and finally, the grocer's bread.
At each stage of production, value is added to the product. The value of the wheat increases from $0.65 to $1.20 after it's turned into flour by the miller. Then, the value further increases to $1.80 when the flour is used to make bread by the baker. Finally, when the grocer sells the bread to the consumer, the value reaches $2.65.
The GDP takes into account the final value of the product which in this case is $2.65 when the bread is sold to the consumer.
Full question:
Stage 1. Farmer's wheat 2. Miller's flour 3. Baker's bread 3. Grocer's bread Value $0.65 $1.20 $1.80 $2.65 Suppose a loaf of bread goes through the following stages of production, with the values noted at the end of each stage: The sale of one loaf of bread adds to GDP O $5.65 $2.65 O $4.45 $6.30