Which of the Following Would Be Counted in the Government

question 89

Multiple Choice

Which of the following would be counted in the government purchases component of GDP?

• A) State and federal government expenditures for highway construction.
• B) The federal government's payments for Social Security.
• C) AFDC payments made to a low-income family with dependent children.
• D) Local government spending for retirement benefits for former employees.

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Definitions:

Break-Even Point

The point at which total costs and total revenue are equal, resulting in neither profit nor loss.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Variable Cost

A cost that varies with the level of output or activity, in contrast to fixed costs, which remain constant regardless of activity.

Fixed Costs

Expenses that do not change with changes in the volume of production or sales, such as rent, salaries, and insurance.