GCEEconomicsNational Income2024

Which of the following is NOT included in the calculation of Gross Domestic Product (GDP) using the expenditure approach?

AGovernment expenditure on public services
BTransfer payments such as pensions and unemployment benefitsCORRECT
CGross fixed capital formation by private firms
DNet exports of goods and services
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
Transfer payments such as pensions and unemployment benefits are not included in GDP because they do not represent payment for any currently produced good or service. They are simply a redistribution of income from the government to individuals. GDP measures the value of final goods and services produced, not income transfers.
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