To encourage formation of small businesses,the government could provide subsidies;these subsidies would be
A)included in GDP because they are part of government expenditures.
B)included in GDP because they are part of investment expenditures.
C)omitted from GDP because they are transfer payments.
D)omitted from GDP because the government raises taxes to pay for them.

Question

Quizplus · Accepted Answer

Subsidies are considered transfer payments, which are not included in GDP calculations because they do not reflect the production of goods or services.

To Encourage Formation of Small Businesses,the Government Could Provide Subsidies;these