Why Are Transfer Payments Not Counted as Part of GDP

question 94

Multiple Choice

Why are transfer payments not counted as part of GDP?

• A) Transfer payments do not involve the purchase of a final good or service.
• B) Transfer payments are not spent within the United States.
• C) Spending by the unemployed and senior citizens is not included in GDP.
• D) Transfer payments are not counted because they must ultimately be paid back.

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Definitions:

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