Transfer payments excluded from GDP Steps:

• Define GDP as value of goods/services produced domestically in current period.
• Use income approach: GDP sums factor payments (wages, rent, interest, profits) from production.
• Identify transfer payments as unearned income not tied to current output.
• Match options to see which fits transfer category.

Why D is correct:

• Pensions are transfer payments redistributing income without current production, excluded per national income accounting definitions.

Why the others are wrong:

• A. Profits reward entrepreneurial input in production, included as factor income.
• B. Rent compensates land use in goods/services creation, included as factor income.
• C. Wages pay for labor contributing to output, included as compensation of employees.

Final answer: D