Question

Recently, the U.S. national income accounts have switched to calling government purchases a. government wages, salaries, and investment expenditure. b. government consumption expenditure and gross investment. c. transfer payments and gross investment by government. d. government spending and transfer payments.

Answer 1

The answer is B.

Step-by-step explanation:

Government spending is one of the components of Gross Domestic Product(GDP) and it includes all the government expenditures(its consumption, transfer spending and investment).

Government spends to influence the economy. For example, government increases its spending when the economy activity in the economy is low or to stimulate the economy.

Option B is correct because it encompasses all the government's area of spending while the remaining options mention one or two functions of the government spending and not all.