Government expenditures does not include
A) state and local spending.
B) federal non-defense spending.
C) transfers.
D) federal defense spending.
E) government investment.

Question

Quizplus · Accepted Answer

Transfers are payments made by the government to individuals or institutions that do not represent payment for goods or services rendered. Examples of transfers include Social Security benefits, welfare payments, and corporate subsidies. Although transfers represent a significant portion of government spending, they are not considered part of government expenditures for the purposes of calculating Gross Domestic Product (GDP). Instead, transfers are subtracted from government revenue to calculate the government's budget surplus or deficit.

Government Expenditures Does Not Include