Define transfer payments and explain why they are not included in the government purchases section of the GDP accounts
What will be an ideal response?
Transfer payments are funds paid to individuals that are not associated with the production of goods and services. They are not included in the government purchases section of the GDP accounts because nothing is being produced in return for the payment. However they do show up in the accounts indirectly when they are spent (and saved) by their recipients; thus they do appear in the consumption (and saving) section of the accounts.
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If the United States donates footballs to Japan, how is the transaction recorded on the U.S. balance of payments accounts?
A) Decline in merchandise trade; increase in financial account B) Decline in financial account; increase in merchandise trade C) Decline in net unilateral transfers; increase in merchandise trade D) Decline in merchandise trade; increase in net unilateral transfers
Inventory investment consists of
A) construction expenditures, raw materials, and inventories of finished goods. B) goods in process, raw materials, and purchases of office machinery. C) raw materials, goods in process, and construction expenditures. D) inventories of finished goods, goods in process, and raw materials.
Which of the following is higher in Mali than in the United Kingdom?
a. Modern sanitation access b. Income per person c. Child mortality d. Percent of the population enrolled in college
Double taxation means that both
a. wage income and interest income are taxed, which is currently the case in the United States. b. wage income and interest income are taxed, which is not currently the case in the United States. c. the profits of corporations and the dividends shareholders receive are taxed, which is currently the case in the United States. d. the profits of corporations and the dividends shareholders receive are taxed, which is not currently the case in the United States.