All of the Following Actions Increase Government Purchases of Goods

question 22

Multiple Choice

All of the following actions increase government purchases of goods and services except the:

• A) federal government's sending a Social Security check to Betty Jones.
• B) federal governments sending a paycheck to the president of the United States.
• C) federal government's buying a Patriot missile.
• D) city of Boston's buying a library book.

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Definitions:

Depreciation

The purposeful spreading of the financial burden of a physical asset over its active life.

Accumulated Depreciation

The total amount of depreciation expensed over an asset's useful life, reducing its book value on the balance sheet.

Commercial Substance

A concept in accounting that indicates a transaction has caused a significant change in future cash flows.

Trade-In Allowance

The value credited to the purchaser when they trade in a used item towards the purchase of a new item.