Many provincial and local governments find themselves faced with increasing retirement expenditures for retired government employees.These increasing expenditures will ________ GDP because they are categorized as ________.
A) increase; government purchases
B) increase; gross private domestic investment
C) decrease; state and local government purchases
D) not change; transfer payments.

Question

Quizplus · Accepted Answer

Retirement expenditures for retired government employees are considered transfer payments, which do not directly affect GDP as they are not payments for goods or services.

Many Provincial and Local Governments Find Themselves Faced with Increasing