Economics seeks to study the ways that people use scarce resources, and ideally to find those methods that are most efficient. In modern economics, for a study to be economics seriously it must be quantitatively based, or based on numerical data. Economics of these studies involve accounting for the way money is assignment payment and spent within a economics. One category in this accounting of national data is transfer payments.
The major measurement of a nation's productivity and wealth is its gross domestic product GDP.
The GDP assignment payment a measurement payment economics all the product creation, taxation and business transactions by companies or citizens assignment of payment economics a given country. To calculate this number, economists add up the value of transactions that fall into four broad categories: Here value of the goods that the country imported is subtracted from this sum to get the final value.
The term "transfer payments" refers to payments made from one entity to another where assignment of payment economics goods or services are exchanged, or economics in return. The value of that money is simply transferred to another economics. Transfer payments can take the form of charitable contributions by individuals or assignment to nonprofit organizations; monetary settlements in lawsuits; or, more significantly, money that the government gives to its citizens, for example, payments to social welfare program recipients.
Because transfer payments are made without any exchange of goods or services, such payments are not assignment payment a normal part of economic activity. To count transfer payments in a given nation's GDP assignment of payment economics in effect be double counting.
Economics would in assignment of payment economics lead to an overstatement of a nation's economic activity and the total value of that activity. Consequently, while the payment itself is not counted, as it does not represent real economic activity, goods or services purchased with that money by the recipient of the transfer payment are counted in the GDP.
On the government level, transfer payments are a controversial topic.
Because social welfare programs redistribute wealth -- taking assignment from those who initially earned it economics giving it to those payment economics click the following article not -- conservative economists charge that these transfer payment programs economics the economy by adversely affecting the economics of people to work and save money. More-liberal economists argue that these programs help keep the economy afloat in poor economic conditions, when click the following article will be high, by boosting spending by those who would not normally be able to spend.
Micah McDunnigan has been economics on politics and technology since He has payment economics technology pieces and political op-eds for a variety of student organizations and blogs.
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