Government Spending on Transfer Payments Is Included in Government Purchases

question 125

True/False

Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services.

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Definitions:

Counter-offer

A response to an original offer, modifying its terms in hopes of reaching an agreement that's more favorable to the responder.

Shares

Financial instruments that represent ownership in a company or financial asset, often entitling the shareholder to a portion of the profits.

Control

The power to govern the financial and operating policies of an entity so as to obtain benefits from its activities, often through ownership of a majority of voting rights.

IFRS 3

An international financial reporting standard that provides guidance on accounting for business combinations, requiring acquired assets and liabilities to be recorded at fair value.