A farmer produces milk, which he sells to a mill for 1000 tk. The mill turns the milk into cream, which he sells to a baker for 1500 tk. The baker turns the cream into a cake, which he sells to consumers for 2000 tk. Consumers eat the cake. a. What is GDP in this economy? Explain. b. What is the total value added of the three producers in this economy? Does this example suggest another way of calculating GDP?

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