Question

Government purchases are ______, which means the products purchased directly absorb resources and are part of domestic output.

Answer 1

Government purchases are part of domestic output and contribute to the Gross Domestic Product (GDP).

Step-by-step explanation:

Government purchases are part of domestic output, meaning the products purchased directly absorb resources. These purchases are considered as part of the Gross Domestic Product (GDP) and contribute to economic activity. For example, when the government buys goods and services such as military equipment or construction projects, it directly affects the domestic economy by creating demand and supporting employment.