What would happen to GDP if the government hired unemployed

What would happen to GDP if the government hired unemployed workers, who had been amount $TR ain unemployment benefits, as government employees and now paid them $TR to do nothing? Explain.

Solution

^{Government transfer payments (TR) do not arise out of any production activity and are thus not counted in the value of GDP. If the government hired the people who receive transfer payments, then their wages would be counted as part of government purchases (G), which is counted in GDP. Therefore GDP would rise even if these workers were paid to do nothing, as government purchases are measured on a cost basis.}