The government-purchases component of GDP includes salaries paid to Army generals but not Social Security benefits to the elderly.

Question

Quizplus · Accepted Answer

The government-purchases component of GDP includes expenditures on goods and services by all levels of government, including salaries paid to government employees such as Army generals. Social Security benefits, on the other hand, are transfers of income to individuals and are not included as part of GDP.

The Government-Purchases Component of GDP Includes Salaries Paid to Army