Question 94 Defense, health, and highway spending are income transfers. True False
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Government spending on transfer payments is included in government purchases when calculating GDP because it results in the production of new goods and services. True or False.
Haricharan G.
True or False: a. Federal spending has grown substantially in recent decades. b. By world standards, the U.S. government controls a relatively large share of the U.S. economy. c. A majority of the federal government's revenue is collected through personal income taxes. d. Education spending is slightly larger at the federal level than at the state and local level. e. State and local government spending has not risen much in recent decades. f. Defense spending is higher now than ever. g. The share of the economy going to federal taxes has increased substantially over time. h. Foreign aid is a large portion, although less than half, of federal spending. i. Federal deficits have been very large for the last two decades. j. The accumulated federal debt as a share of GDP is near an all-time high.
Categorize each of these examples of federal spending as direct spending, transfer payment, or grant-in-aid: $\bullet$ computers for IRS $\bullet$ disability benefits $\bullet$ flood control in Gulf Coast region $\bullet$ highway funds for states $\bullet$ medical care for elderly $\bullet$ money for urban housing $\bullet$ price supports for farmers $\bullet$ repair of space shuttle $\bullet$ salaries for national park rangers
Government Revenue and Spending
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