With Respect to GDP, How Are Welfare Payments Treated

question 66

Multiple Choice

With respect to GDP, how are welfare payments treated?

• A) They are included in GDP because they represent payment for work performed in the past.
• B) They are included in GDP because they represent potential consumption.
• C) They are excluded from GDP because they do not represent current government purchases of goods and services.
• D) They are excluded from GDP because they are not private pensions.

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Definitions:

Principal

The amount of money originally invested or loaned, upon which interest is calculated, or in agency relationships, the person who empowers an agent to act on their behalf.

Gratuitous Agent

An agent who acts on behalf of another without receiving any compensation for their services.

Paid Agent

A professional or entity compensated to act on behalf of another in a transaction or negotiation.

Principal's Relationship

A legal concept that describes the relationship between a principal (one who grants authority) and an agent (one who acts on the principal's behalf).