Suppose a government collects $12 billion in various tax revenues,and pays $2.5 billion in debt interest,$9 billion in social security benefits,and $0.5 billion in government employee wages.What is the direct contribution to GDP coming from this government's fiscal actions?

Question

Quizplus · Accepted Answer

The direct contribution to GDP from the government's fiscal actions is the spending on goods and services, which in this case is the $0.5 billion paid in government employee wages. Payments for debt interest and social security benefits do not directly contribute to GDP as they are not payments for goods or services produced within the economy.

Suppose a Government Collects $12 Billion in Various Tax Revenues,and