After the terrorist attacks on September 11, 2001, governments raised expenditures to increase security at airports. How are these purchases of goods and services treated in GDP?

Question

Quizplus · Accepted Answer

Government expenditures are included in GDP, regardless of whether they are considered productive or not. Therefore, the purchases of goods and services to increase airport security after the terrorist attacks would be included in GDP. The fact that taxes may have to be raised to pay for these expenditures does not affect their inclusion in GDP.

After the Terrorist Attacks on September 11, 2001, Governments Raised