Which Component of Federal Spending Is Included in GDP

question 49

Multiple Choice

Which component of federal spending is included in GDP?

• A) net exports
• B) transfer payments
• C) government purchases
• D) capital supply

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Definitions:

Progressive Tax

A taxation system where the tax rate increases as the taxable income increases, typically placing a higher burden on higher-income earners.

Tax Schedules

Detailed charts or tables provided by tax authorities that outline the rates at which taxes are levied on different levels of income or taxable activities.

Taxable Income

The portion of an individual's or entity's income that is subject to taxation according to governing laws.

Infinite Elasticity

A theoretical situation where the quantity demanded or supplied of a product responds infinitely to changes in price; essentially, the smallest price change can lead to an unlimited demand or supply.