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Sagot :
The Transfer payments are not included as a government expenditure when calculating GDP as they are counted as personal consumption expenses.
A transfer payment is a payment to a person or organization which has given or exchanged no goods or services for it. They do not reflect an economy's production.
Gross domestic product is a monetary measure of the market value of all the final goods and services produced and sold in a specific period by countries. It includes goods and services produced for sale in the market and some non-market productions like education services.
While GDP considers government expenses, it does not consider social security payments, as these do not have any final demand. The transfer of payment made for the purchase of goods or services will be considered as consumption in GDP.
To know more about Transfer payments,
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