Government spending on subsidies is included in government consumption when calculating GDP because it results in the production of new goods and services.

Question

Quizplus · Accepted Answer

Government spending on subsidies is not considered part of government consumption when calculating GDP, as it is not directly used to purchase goods or services. Rather, subsidies are considered a transfer payment, which is not included in GDP calculations.

Government Spending on Subsidies Is Included in Government Consumption When