One Bag of Flour Is Sold for $1

question 12

Multiple Choice

One bag of flour is sold for $1.50 to a bakery, which uses the flour to bake bread that is sold for $4.00 to consumers. A second bag of flour is sold to a consumer in a grocery store for $2.00. Taking these three transactions into account, what is the effect on GDP?

• A) GDP increases by $1.50.
• B) GDP increases by $3.50.
• C) GDP increases by $6.00.
• D) GDP increases by $7.50.

Grasp the specifics of income distribution within the United States, including specific income levels and percentages of income distribution among different quintiles.

Understand the mechanisms and implications of income redistribution and its effects on society.

Analyze the impact of government policies on poverty and income inequality.

Recognize the complexity in measuring income inequality and poverty rates.