Which of the following is included in government purchases?
A)Government purchases of investment goods.
B)Transfer payments.
C)Government spending on services.
D)both (a) and (c)

Question

Which of the following is included in government purchases?
A)​Government purchases of investment goods.
B)​Transfer payments.
C)​Government spending on services.
D)​both (a) and (c)

Quizplus · Accepted Answer

Government purchases include both investment goods (such as infrastructure) and spending on services (such as salaries of government employees). Transfer payments, on the other hand, are not included in government purchases as they are payments made by the government to individuals or firms for which no good or service is directly received in return. Examples of transfer payments include welfare, Social Security, and unemployment benefits.

Which of the Following Is Included in Government Purchases