A Bakery Uses Flour to Produce Bread

question 58

Multiple Choice

A bakery uses flour to produce bread.When calculating GDP, we include _______ because when we add the value of the flour to the value of the loaf of bread to calculate GDP, the result is _______.

• A)only the value of the flour used to produce the bread; double counting
• B)both the value of the bread sold in a store and the value of the flour used to produce the bread; the true value of the economy's output
• C)both the value of the bread sold in a store and the value of the flour used to produce the bread; double counting
• D)only the value of the bread sold in a store; double counting
• E)the value of the bread sold in a store, the value of the flour used to produce the bread, and the wage rate paid to the baker; less than the true value of the economy's output

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Definitions:

IFRS

International Financial Reporting Standards, which are a set of accounting principles used globally to ensure financial reporting consistency and transparency.

Current Liabilities Netted

The process of offsetting current assets against current liabilities to determine the net working capital or financial position in the short term.

Federal Income Tax Withholding

The process where employers withhold a portion of employees' wages as an advance payment of federal income tax.

Hourly Wage Rate

The hourly wage rate is the amount of money paid to an employee for each hour of work performed.