Suppose that the government collects $3 million in taxes,pays $2 million in Employment Insurance benefits,pays $0.5 million in interest on the national debt,and pays workers $1 million to sit at their desks and work as little as possible.The government's contribution to GDP is
A) $0.
B) $1 million.
C) $1.5 million.
D) $3 million.
E) $3.5 million.

Question

Quizplus · Accepted Answer

The government's contribution to GDP is the value of goods and services it produces, which in this case is the $1 million paid to workers. Other payments like interest and benefits do not count as production.

Suppose That the Government Collects $3 Million in Taxes,pays $2