In the Expenditures Approach, Transfer Payments Such as Unemployment Compensation

question 121

True/False

In the expenditures approach, transfer payments such as unemployment compensation are included in the G component of GDP.

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, leading to a lower cost per unit as output increases.

Adam Smith

Adam Smith was an 18th-century Scottish economist and philosopher, best known for his works on the principles of free market capitalism, particularly as outlined in "The Wealth of Nations."

Henry Ford

An American industrialist and founder of the Ford Motor Company, notable for pioneering mass production techniques like the assembly line.

Pin Factory

An example used by Adam Smith to describe the benefits of division of labor and specialization in increasing production efficiency.