Match the scenarios given to the government expenditure. Then state the government program, whether or not the expenditure is included in GDP and how it affects GDP.

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter8: Economic Fluctuations, Unemployment, And Inflation
Section: Chapter Questions
Problem 14CQ
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Match the scenarios given to the government expenditure. Then state the government program, whether or not the expenditure is included in GDP and how it affects GDP.

 

Scenario

Government Program

Counted in GDP (Yes or No)

Effect on GDP (Increase, Decrease or No Change)

Metro Council approves a new police contract, which includes a 2% raise for police officers.

 

 

 

Due to the COVID-19 pandemic the government closes down National Parks for two months.

 

 

 

A woman with three children is out of work and her children need vaccinations.

 

 

 

Both adults in a family of four lost their jobs and file for aid.

 

 

 

The local government installs a new splash park outside the local recreation center.

 

 

 

A man cashes his retirement check.

 

 

 

State tax revenue is down due to the current economic recession. The state has to reduce subsidies to local school districts.

 

 

 

Due to widespread unemployment, the federal government provides additional funding for unemployment checks.

 

 

 

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