Purchases of goods and services are included in GDP, but transfer payments are not included.

Question

Quizplus · Accepted Answer

Purchases of goods and services contribute to the production of a country's output and are therefore included in GDP. Transfer payments, on the other hand, are payments made by the government to individuals or other governments without any corresponding production of goods or services. They are not included in GDP.

Purchases of Goods and Services Are Included in GDP, but Transfer