Social Security payments are

(A) included in GDP because they represent current income.
(B) included in GDP because they represent potential consumption.
(C) excluded from GDP because they are not private pensions.
(D) excluded from GDP because they do not reflect the economy’s production.

(D) excluded from GDP because they do not reflect the economy’s production.

Explanation:

Social security payment are transfer payments. These payment are not included in the total GDP value. It does not represent the production of services performed during the period, These are included in the personal expenditures as these are used for the purchase of different products. So the correct answer is (D) excluded from GDP because they do not reflect the economy’s production.

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