Transfer Payments Are

question 10

Multiple Choice

Transfer payments are

• A)included in GDP because they represent income to individuals.
• B)included in GDP because they eventually will be spent on consumption.
• C)not included in GDP because they are not payments for currently produced goods or services.
• D)not included in GDP because taxes will have to be raised to pay for them.

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Definitions:

Unit Selling Price

The cost for one unit of a product when it is sold.

Unit Variable Costs

Costs that vary directly with the volume of production or sales, such as materials and labor, on a per-unit basis.

Contribution Margin Ratio

A financial metric that measures the portion of revenue remaining after variable production costs that can contribute to covering fixed costs and generating profit.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit, indicating how much each unit sold contributes to fixed costs and profit.