PRC-3 · Chapter 13 · Question 15 of 50
When calculating National Income using the Income Method, which of the following payments must be strictly EXCLUDED because it does not correspond to any current productive economic activity?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) A government unemployment welfare cheque
Explanation
Unemployment benefits and pensions are 'transfer payments'. They are merely transfers of money from taxpayers to recipients without any corresponding production of goods or services, so they are excluded from GDP.
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