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(Solved): One of the major problems that national accountants have to deal with is the problem of double count ...
One of the major problems that national accountants have to deal with is the problem of double counting when calculating the GDP. Based on the below transaction, show the impact on the GDP of double counting answering the questions that follows.
??A farmer produces 1 000 bags of wheat which he sells to a miller at
R10 per bag, yielding a total of R10 000.
??The miller processes the wheat into flour, which he then sells to a baker for R12 500.
??After baking bread with the flour, the baker sells it to a shop for R18
??The shop subsequently sells the bread to final consumers for R21
???What is the total value of the above four transactions?
???Calculate the GDP from the above transactions using the value-added method.