Transfer payments are excluded from government purchases because it:

A) they are a reward to individuals who have been productive in their entire lives.

B) they are already included as part of the investment.

C) they are difficult to measure.

D) nothing is being produced in return for the payment.

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2 Jun 2021

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Related questions

Transfer payments are excluded from government purchases in GDP accounting because

A) they are difficult to measure.
B) they are a reward to individuals who have been productive their entire lives.
C) they are already included as part of investment.
D) nothing is being produced in return for the payment.

magentabear448

1. What does the investment component of GDP measure?

a. spending by households on goods and services

b. spending by government agencies on goods and services

c. spending on goods to be used in future production

d. spending on domestically produced goods by foreign buyers

2. A good produced in the current time period but put into a firm's inventory instead of being sold

a. is only included as a part of consumption in future GDP when it is sold.

b. is counted as consumption in the current GDP since it was produced in the current time period.

c. is excluded from the current GDP.

d. is considered unsold inventory and counted as a part of the investment in current GDP.

burgundycrow837

MACROECONOMIC PRINCIPLES Gross Domestic Product (GDP) is the market value of all final goods and services produced within a country in a given period of time.

A) Name the contents of the four components of expenditure.

B) What is meant by nominal GDP; how does it differ from real GDP and how is the latter calculated?

C) The government portion of expenditures in the GDP does not include spending on transfer payments such as Social Security. Why are they excluded? (See page 202 in the textbook, 7th edition; 8th edition page196)

D) Give reasons as to why a higher GDP can be assumed to engender greater well-being in the people whose endeavors attained this elevation. Alternatively, explain why a larger GDP appears not to make people any happier.