Which of the following should be excluded while calculating GNP?

Transfer payments

The correct answer is Option 4: Transfer payments

Gross National Product (GNP) represents the total market value of all final goods and services produced by a country's residents in a given year, regardless of their location. Only factor income or factor payments are included in GNP calculation. Transfer payments are excluded. options 1, 2 and 3 are examples of factor payments and hence are part of GNP.

Transfer payments are one-sided transfers of income that do not involve the production of goods or services. Examples include social security benefits, unemployment benefits, and welfare payments. They redistribute income but don't add to the economy's total output.