answer fast Classify each of the following(b) ´expenses as real or transfer expenditures andjustify your answer:(i) Government scholarship for students(ii) Salaries for government employees

Transfer expenditure is the money spent by the government for which it doesnot expect income in…

Answered: Cld xpenses as real or transfer…

Cld xpenses as real or transfer expenditures and istify your answer: ) Government scholarship for students i) Salaries for government employees

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter15: Fiscal Policy

Section: Chapter Questions

Problem 10SQP

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Concept explainers

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.

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Classify each of the following
(b) ´
expenses as real or transfer expenditures and
justify your answer:
(i) Government scholarship for students
(ii) Salaries for government employees

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