Story: National income and GDP

From wheat to bread

From wheat to bread

This diagram shows the steps that occur between the initial growing of wheat, through to the bread that is purchased. At each stage in the production process there is an economic transaction. The farmer sells wheat to the mill; the miller sells flour to the baker; the baker sells the loaf to a shop, which then makes a final sale to a hungry customer. Gross domestic product (GDP) does not measure any of the intermediate transactions, only the value of the final sale to the consumer.

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How to cite this page:

Jeff Cope, 'National income and GDP - Gross domestic product', Te Ara - the Encyclopedia of New Zealand, (accessed 16 August 2022)

Story by Jeff Cope, published 11 Mar 2010