Which of the following does not appear in GDP as a part of government spending?
A. Clipboards at the Department of Motor Vehicles.
B. Maintenance of government buildings.
C. Social Security payments.
D. City fireworks displays on the Fourth of July.
C. Social Security payments.
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In what way does prospect theory differ from the standard theory of expected utility?
a. With prospect theory, preferences depend only on final wealth levels. b. With prospect theory, preferences vary with initial (reference) wealth levels. c. With prospect theory, individuals are risk loving over small losses. d. With prospect theory, risk aversion does not play a role.
Under a balanced budget policy, a sharp decline in GDP will cause
a. no serious budget changes. b. a tax cut or an increase in expenditures. c. a tax increase or expenditure cut. d. tax receipts to exceed government expenditures.
M1 has decreased in its usefulness in understanding inflation due to:
A. more reliance on the use of currency. B. the increased use of checks in the economy. C. the introduction of money market mutual fund shares and similar checking substitutes. D. the increased use of electronic payments.
Under present U.S. law, cocaine is an example of
A. a capital good. B. a government-sponsored good. C. a government-inhibited good. D. a public good.