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Transfer Payments Are Excluded from the Government Component in the Calculation

Question 2

Multiple Choice

Transfer payments are excluded from the government component in the calculation of GDP because


A) they do not represent the purchase of a good or a service.
B) they are small enough to ignore when computing the national accounts.
C) they are not counted as income by any economic agent.
D) it is difficult to assess the market value of a transfer payment.
E) they do not generate additional income in the economy.

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