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In 2014, a farmer grows and sells $3 million worth of corn to big flakes cereal company. big flakes cereal company produces $8 million worth of cereal in 2014, with sales to households during the year of $7 million. the unsold $1 million worth of cereal remains in big flake cereal company's inventory at the end of 2014. the transactions just described contribute how much to gdp for 2014?

Respuesta :

jushmk
Domestic gross product (GDP) is used for overall monitoring of an economy. In this regard, it measures the well-being of the  society.

In the current scenario, the funds invested was $3 million while the overall value of the harvest was $8 million. In this regard, the overall contribution to the GDP in 2014 due to the transactions described is the overall harvest and that is $8 million worthy of cereal.
dubeyshailja64

The overall contribution of the transaction to the GDP is $8 million.

What is GDP?

Gross Domestic Product or GDP is the value of goods and services produced within an economy in a year. The value of intermediate consumption is subtracted for calculating the GDP to avoid the chances of double counting.

The value of GDP in the given question will be:

[tex]\begin{aligned} \rm Produces\:by\:the\:farmer&=\rm \$3\:million\\\\\rm Produces\:by\:the\:company&=\$8\:million\\\\\rm Less: Intermediate\:consumption &=\rm (\$3\:million)\\\\\rm GDP &=\rm \$8\:million\end[/tex]

The value of corn used by corn flakes cereal company will be reduced as intermediate consumption.

Therefore the value of contribution to the GDP is $8 million.

Learn more about GDP here:

https://brainly.com/question/4131508

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