The Government Spending Component of GDP Includes All of the Following

question 165

Multiple Choice

The government spending component of GDP includes all of the following except:

• A) federal spending on goods.
• B) state and local spending on goods.
• C) federal spending on transfer payments.
• D) federal spending on services.

---

Definitions:

Periodic Method

An accounting inventory system where updates to the inventory records are made periodically at the end of an accounting period.

Net Purchases

The total amount of purchases minus purchase returns, allowances, and discounts received during a specific period.

Gross Profit

The difference between the revenue generated from goods or services sold and the cost of goods sold (COGS), before deducting overhead, payroll, taxation, and interest payments.

Operating Expenses

Expenses incurred during the ordinary course of business operations, including costs related to sales, administration, and general activities.