1.Discuss why does economic growth not include spending for social welfare payments and unemployment programs.
1) The economic growth is the increase in the inflation-adjusted market value of goods and services produced by an economy over time. Economic growth represents a positive or negative economic situation over a period of time. When we adjust the economic growth, usually look at the total income that everyone in the economy is earning. There are usually two ways to measure economic growth, GDP and GNP.
2) GNP (gross national product) refers to a country 's nationals have all the elements of production in a certain period of time produced by the final product of the market value. By contract, GDP, gross domestic product …show more content…
Social welfare payment and unemployment program is actually belonging to the government transfer payment part, it is not included in the calculation of GDP.
Government transfer payment is not in order to obtain current produced goods and services as a compensation of expenditure, including aspects of the government in social welfare payment, social insurance, unemployment program, poverty assistance, old age security, health care, spending on agricultural subsidies, etc.
Government transfer payment is government through its functions to transfer and redistribution income between different members of society. The government transfer payment essence is a redistribution of social wealth, move the income of some people to another part of people. Furthermore, when the government transfer payment occur, the government cannot get the relative final goods and services through their transfer expenditure. Government transfer payments are a monetary expenditure, total income of the whole society has not changed. Thus, Government transfer payments are not included in