Which of the following is not included in GDP?
Answer and explanation
Correct answer: Transfer payment in the form of pension
GDP measures the market value of currently produced final goods and services within a country. A new book, paid transport, and construction of a new house represent current production and can be included. A pension is a transfer payment: it shifts purchasing power from one person or institution to another without payment for current production. Therefore, option D is correct.
Frequently asked questions
What is the correct answer to this question?
Transfer payment in the form of pension
Why is this the correct answer?
GDP measures the market value of currently produced final goods and services within a country. A new book, paid transport, and construction of a new house represent current production and can be included. A pension is a transfer payment: it shifts purchasing power from one person or institution to another without payment for current production. Therefore, option D is correct.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
