Why Are Government Expenditures Such as Old Age Security Payments,employment

question 46

Multiple Choice

Why are government expenditures such as Old Age Security payments,employment insurance payments,or welfare benefits paid to individuals not considered part of G,the government component of aggregate expenditure?

• A)These are transfer payments and place no direct demand on Canada's total output.
• B)These payments are directly included as part of C,consumption,because they become consumption expenditure for the recipient.
• C)Since the revenues from which these payments are made did not originate from tax collection,they are not considered part of G.
• D)Since these expenditures are transfers from recipients to taxpayers,they are not included in G.
• E)These payments are included in G only when the payments are made directly by the federal government.

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Definitions:

Gini Ratios

A metric assessing the uneven distribution of income among individuals in a population, with 0 being total equality and 1 representing absolute inequality.

Income Inequality

The disparate sharing of income among participants in an economy, be they individuals or households.

Income Distribution

The way in which total income is shared among the population or different groups within society.

Lowest Quintile

The segment of a population that falls into the bottom 20% based on income or another measurable characteristic.