PRC-3 · Chapter 13 · Question 6 of 50
When computing GDP using the 'Income Method', which of the following is explicitly EXCLUDED from the calculation because it does not represent income generated from current economic production?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Transfer payments like government pensions or welfare
Explanation
Transfer payments are one-way payments from the government to individuals (like pensions) without any productive service given in return, so they are excluded from GDP.
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