Which of the following is true of government purchases?
A) They are positively related to current income.
B) They are negatively related to current income.
C) They include transfer payments.
D) They are decided by public officials.
E) They depend on the market rate of interest.

Question

Quizplus · Accepted Answer

Government purchases are decided by public officials, which makes D the correct answer. Option A is incorrect, as government purchases do not have a direct relationship with current income, although they may indirectly affect it. Option B is also incorrect, as there is no negative relationship between government purchases and current income. Option C is incorrect because transfer payments are not included in government purchases. Option E is incorrect because government purchases are not dependent on the market rate of interest.

Which of the Following Is True of Government Purchases