Transfer payments are included in which category under the expenditure approach to GDP accounting?
A)consumption
B)government purchases
C)net exports
D)Transfer payments are not directly included in GDP calculations.

Question

Transfer payments are included in which category under the expenditure approach to GDP accounting?
A)​consumption
B)​government purchases
C)​net exports
D)​Transfer payments are not directly included in GDP calculations.

Quizplus · Accepted Answer

Transfer payments are not directly included in GDP calculations. They are not a part of consumption, government purchases, or net exports. Transfer payments are payments made to individuals or households without requiring any current economic activity in return. Examples include social security benefits, welfare payments, or unemployment benefits. These payments do not reflect current production or economic activity and are therefore not included in GDP calculations.

Transfer Payments Are Included in Which Category Under the Expenditure