Why Are Transfer Payments Not Counted as Part of GDP

question 4

Multiple Choice

Why are transfer payments not counted as part of GDP?

• A) Counting transfer payments constitutes double-counting when they are used to purchase final goods and services.
• B) Most transfer payments are not spent within the United States.
• C) Spending by the unemployed and senior citizens is not counted as part of GDP.
• D) Transfer payments are always paid back and so they cannot be counted twice.

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