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Explain What Is and What Is Not Included in Government

question 26

Essay

Explain what is and what is not included in government purchases in GDP.


Definitions:

Contract Maturity

The specified date on a financial contract when the final payment is made or the contract comes to an end.

Futures Price

The agreed-upon price for a financial instrument or commodity to be delivered and paid for at a future date.

Spot Price

The current market price at which an asset can be bought or sold for immediate delivery.

Profit

The financial gain achieved when the amount earned from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

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