ECONOMICS
GDP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Recipients of transfer payments have not produced or supplied goods and services in exchange for these payments.
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Transfer payments are a government expenditure, and government expenditures are excluded from gross domestic product.
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Transfer payments are used to pay for intermediate goods, and intermediate goods are excluded from gross domestic product.
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Recipients of transfer payments are usually children, and income earned by children is excluded from gross domestic product.
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Recipients of transfer payments are sometimes not citizens of the United States.
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Detailed explanation-1: -Transfer payments are not included in determining a country’s Gross Domestic Product because they are not compensations for productive economic activities.
Detailed explanation-2: -Which of the following best explains why transfer payments are not included in the calculation of gross domestic product? Recipients of transfer payments have not produced or supplied goods and services in exchange for these payments.
Detailed explanation-3: -Transfers are not included in GDP, because they do not represent production. Production of non-marketed goods and services-such as home production like when you clean your home-is not counted because these services are not sold in the marketplace.
Detailed explanation-4: -Expert-Verified Answer 2. Transfer payments, donations, and gifts are not included in GDP. These services do not expect any service or payment in return.
Detailed explanation-5: -The official measure of GDP does not include measurements of leisure time available, nonmarket production, production in the underground economy, the distribution of income, or production externalities (e.g., pollution).