In Calculating GDP,"transfer Payments" Are

question 2

Multiple Choice

In calculating GDP,"transfer payments" are

• A)included because they are re-valuations of existing wealth.
• B)excluded because no goods or services were produced in exchange for them.
• C)included because they are payments for labor services.
• D)excluded because used goods already counted the year they were produced.

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Definitions:

Income

Earnings received by an individual or business in exchange for work, services, or investments, typically measured over a certain period of time.

Pareto Efficient

An allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.

Pure Exchange Economy

An economic model assuming no production, where agents trade existing goods and services, focusing on the allocation and distribution based on preferences.

Consumption Bundles

A combination of various goods and services chosen by a consumer based on their budget and the utility derived from the items.