Why Are Transfer Payments Excluded from the Government Component (G_a)in

question 101

Multiple Choice

Why are transfer payments excluded from the government component (G_a) in the calculation of GDP?

• A)Because they do not represent the purchase of a good or a service.
• B)Because they are not counted as income by any economic agent.
• C)Because they do not generate additional income in the economy.
• D)Because it is difficult to assess the market value of a transfer payment.
• E)Because they are small enough to ignore when computing the national accounts.

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