The government spending component of GDP includes all of the following except:
A) federal spending on goods.
B) state and local spending on goods.
C) federal spending on transfer payments.
D) federal spending on services.

Question

Quizplus · Accepted Answer

Transfer payments are not included in the government spending component of GDP because they do not represent purchases of goods or services. Transfer payments are payments made by the government to individuals or other entities as a form of income redistribution or social welfare, such as Social Security or unemployment benefits.

The Government Spending Component of GDP Includes All of the Following