Transfer payments are "exhaustive" in that they directly absorb resources, whereas government purchases are "nonexhaustive."

Question

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Transfer payments are "nonexhaustive" because they do not directly absorb resources or result in the production of goods and services, whereas government purchases are "exhaustive" as they directly use resources for the production or acquisition of goods and services.

Transfer Payments Are "Exhaustive" in That They Directly Absorb Resources