Which of the Following Would Increase the Government Purchases Component

question 133

Multiple Choice

Which of the following would increase the government purchases component of U.S. GDP?

• A)The U.S. federal government pays $3 billion in pensions to government workers.
• B)The U.S. federal government pays $3 billion in interest on the national debt.
• C)The U.S. federal government pays $3 billion in salaries to soldiers in the military.
• D)The U.S. federal government pays $3 billion in interest to foreign holders of U.S. government bonds.

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Definitions:

Strike Price

The set price at which an option's owner has the right to purchase (for a call option) or sell (for a put option) the underlying asset.

Stock Call Option

A financial derivative that gives the buyer the right, but not the obligation, to buy a specific stock at a predetermined price within a set period.

Stock Price

The current price at which a share of a company is bought or sold in the stock market, reflecting the company's perceived value and investor demand.

Dollar Change

Dollar Change indicates the absolute change in the price of a stock, bond, commodity, or index from one day to the next.