Which component of federal spending is included in GDP?
A) net exports
B) transfer payments
C) government purchases
D) capital supply

Question

Quizplus · Accepted Answer

Government purchases are included in GDP because they represent spending on goods and services that contribute directly to the economy. Net exports are the difference between exports and imports and are not considered part of domestic production. Transfer payments are simply transfers of income and do not represent production or economic growth. Capital supply is a vague term and does not refer to a specific component of federal spending.

Which Component of Federal Spending Is Included in GDP