A farmer grows a bushel of wheat and sells it to a Miller for $20.00. The Miller turns the wheat into flour and then sells it to a Baker for $25.00. The Baker uses the flour to bake bread and sells the bread to a Musician for $40.00. The Musician eats the bread. The Musician, also grows pumpkins in his backyard garden to feed his family. a. What is GDP? b. What is the valued added by each person? c. Should the pumpkins be included in GDP? Explain your answer. d. Why does GDP not include in goods that are resold? e. Why is it desirable for a country to have a large GDP?
A farmer grows a bushel of wheat and sells it to a Miller for $20.00. The Miller turns the wheat into flour and then sells it to a Baker for $25.00. The Baker uses the flour to bake bread and sells the bread to a Musician for $40.00. The Musician eats the bread. The Musician, also grows pumpkins in his backyard garden to feed his family. a. What is GDP? b. What is the valued added by each person? c. Should the pumpkins be included in GDP? Explain your answer. d. Why does GDP not include in goods that are resold? e. Why is it desirable for a country to have a large GDP?
Chapter5: An Introduction To Macroeconomics
Section: Chapter Questions
Problem 3TY
Related questions
Question
A farmer grows a bushel of wheat and sells it to a Miller for $20.00. The Miller turns the wheat
into flour and then sells it to a Baker for $25.00. The Baker uses the flour to bake bread and sells
the bread to a Musician for $40.00. The Musician eats the bread. The Musician, also grows
pumpkins in his backyard garden to feed his family.
a. What is
b. What is the valued added by each person?
c. Should the pumpkins be included in GDP? Explain your answer.
d. Why does GDP not include in goods that are resold?
e. Why is it desirable for a country to have a large GDP?
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