Transfer Payments Are

question 18

Multiple Choice

Transfer payments are

• A)excluded when calculating GDP because they only reflect inflation.
• B)excluded when calculating GDP because they do not reflect current production.
• C)included when calculating GDP because they are a category of investment spending.
• D)included when calculating GDP because they increase the spending of recipients.

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Definitions:

Promisee

In a third-party beneficiary contract, the party to the contract who owes something to the promisor in exchange for the promise made to the third-party beneficiary.

Third-Party Beneficiary

A recipient of contractual benefits who is not one of the contracting parties; created when two parties enter into a contract with the intended purpose of benefiting a third party.

Creditor Beneficiary

A third party that benefits from a contract made between two other parties, especially in terms of having the right to claim performance or compensation.

Donee Beneficiary

An external party that gains advantages from an agreement established between two different parties.