In the following 2 cases, what are the impacts on GDP of year N and year N+1? What about the impacts on expenditure side, income side and product side?

  • A baker buys 10 dollars of wheat flour on 31/12/N. On 1/1/N+1, he uses the flour to make breads and sells them all to consumers for 15 dollars;
  • A gas station buys 10 dollars of gasoline from the oil company on 31/12/N and stores it. On 1/1/N+1, they sell all the gasoline to consumers for 15 dollars. In my opinion, both cases refer to final goods of 10 dollars in year N. Fot the 1st case, GDP of year N+1 increases by 5 dollars while in the 2nd case, it does not change.


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