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Homework answers / question archive / 1)In the expenditure approach to GDP, which of the following government payments would be excluded from measurements of GDP? O government payments for welfare programs

1)In the expenditure approach to GDP, which of the following government payments would be excluded from measurements of GDP? O government payments for welfare programs

Economics

1)In the expenditure approach to GDP, which of the following government payments would be excluded from measurements of GDP? O government payments for welfare programs. None, all government payments are included in GDP. government payments for goods produced by foreign firms. government payments for goods produced by firms owned by state or local governments.

2)The consumer price index is 132 in 2020 and 112 in 2019 when the base year is 2007. The annual inflation rate in the year 2020 is (round off to the nearest percentage point) 32 percent unknown, as there is not sufficient information. 12 percent O 18 percent

 

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1)Answer - Government payments for welfare programs.

Explaination -

While calculating GDP by way of expenditure method, consumption expenditure, investment expenditures, government expenditures and net exports are taken into consideration.

Government expenditures includes expenditures by federal or state governments for public goods and services on areas like healthcare, defence, education etc. This expenditure by government in calculating GDP doesn't takes into consideration, the spendings made by government on welfare programs like pension plans, retirement benefits, and other such social security benefits.

This is because it's just transfer of money and not actual expenditure, it will be considered in GDP when the people who recieves it, actually spends on goods and services by way of consumption expenditure.

2)annual inflation rate in year 2020

=(consumer price index in 2020/consumer price index in 2019)-1

=(132/112)-1

=18%

=18 percent

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