Which of the Following Is the Largest Category of Federal

question 25

Multiple Choice

Which of the following is the largest category of federal government expenditures?

• A)health care spending
• B)transfer payments to individuals
• C)interest on government debt
• D)grants to provincial and local governments
• E)military spending

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Definitions:

Government Purchases

Spending on products and services by all levels of government, not including transfer payments.

Unemployment Insurance

A government program that provides financial assistance to workers who have lost their jobs through no fault of their own.

Discretionary Fiscal Policy

Government policy that entails the use of government spending and tax policies to influence the economy, based on specific goals or conditions.

Keynes

Refers to John Maynard Keynes, a British economist whose theories on government spending and monetary policy influenced modern macroeconomics.