Which of the following is a government expenditure,but is not a government purchase?
A)The federal government buys a Humvee.
B)The federal government pays the salary of an FBI agent.
C)The federal government pays out an unemployment insurance claim.
D)The Federal government pays to support research on AIDS.

Question

Quizplus · Accepted Answer

Government expenditure includes both government purchases and transfer payments. A government purchase refers to the acquisition of a good or service by the government from a private seller, such as buying a Humvee (option A). However, paying out an unemployment insurance claim (option C) is a transfer payment as it involves giving money to an individual without receiving a good or service in return. Options B and D are also government expenditures, but they both involve government purchases.

Which of the Following Is a Government Expenditure,but Is Not