After the Terrorist Attacks on September 11, 2001, Governments Raised

question 90

Multiple Choice

After the terrorist attacks on September 11, 2001, governments raised expenditures to increase security at airports. How are these purchases of goods and services treated in GDP?

• A)They are not included in GDP since they are not productive.
• B)They are not included in GDP since governments will have to raise taxes to pay for them.
• C)They are included in GDP since government expenditures are included in GDP.
• D)They are included in GDP only to the extent that the federal, and not provincial or local governments, paid for them.

---

Definitions:

Credit Memo

A document issued by a seller to a buyer, reducing the amount that the buyer owes to the seller under the terms of an earlier invoice.

NSF Checks

Checks that are not honored by the bank due to insufficient funds in the account of the drawer.

Bank Service Charges

Fees charged by banks for account maintenance, transactions, and other financial services.

Outstanding Checks

Checks that have been written and recorded in the checking account ledger but have not yet been cashed or cleared by the bank.