Suppose that the government collects $3 million in taxes,pays $2 million in social security 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) $3 million.
D) $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, as it represents government spending on services. Other payments like social security benefits and interest on debt do not contribute to GDP.

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