Question

transfer payments to are not included in the national income through it is a part of circular flow justify your answer?​

Answer 1

Transfer payments are not included while calculation of National Income because these incomes are received without generating any factor services in return though it is a part of the circular flow of income, e.g. pocket money, old age pension, etc.

Answer 2

Answer:

Transfer income is not included in national income because it is not connected with any productive activity and there is no value addition.

Explanation:

Transfer payments are not included when computing national income because these incomes are received without generating any factor services in return, although it is a part of the circular flow of income, e.g. Pocket money, old age pension, etc.