CFA Practice Question

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CFA Practice Question

A miller buys a pound of wheat from a farmer for 30 cents, grinds it into flour and sells it to a baker for 60 cents. The baker combines the flour with other ingredients and makes a loaf of bread. The baker sells the bread to the grocery store for 90 cents. The grocery store then adds 10 cents and sells it to a customer. How much should be included in the GDP in this example?
Correct Answer: $1

This reflects the value added at each stage of production and should be added to GDP.

User Contributed Comments 1

User Comment
Hermalia GDP = .9 + .1 =$1 as the bread is the final product.
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