In calculating GDP, governmental transfer payments, such as welfare payments, are:
A)not counted.
B)counted as investment spending.
C)counted as government spending.
D)counted as consumption spending.

Question

Quizplus · Accepted Answer

Governmental transfer payments are not counted in GDP calculations because they are not payments for goods or services; they are simply redistributions of income.

In Calculating GDP, Governmental Transfer Payments, Such as Welfare Payments