Transfer Payments Are Excluded from the Government Component in the Calculation

question 65

Multiple Choice

Transfer payments are excluded from the government component in the calculation of GDP because

• A)they do not represent the purchase of a good or a service.
• B)they are not counted as income by any economic agent.
• C)they do not generate additional income in the economy.
• D)it is difficult to assess the market value of a transfer payment.
• E)they are small enough to ignore when computing the national accounts.

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