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Using practical examples, explain the difference between transfer payments and government purchases.
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- Explain the difference between government purchases and transfer payments.From the 1960s to 2020, transfer payments A. have declined by half as a percentage of total federal government expenditures. B. have grown very slowly as a percentage of total federal government expenditures. C. remained the same percentage of total federal government expenditures. D. have risen from 25 percent to just over 50 percent percent of federal government expenditures.We can think of an increase in government transfer payments as a- a decrease in G b- an increase in G c- an increase in T d- a decrease in T
- True or false: transfer payments alter household income, but they do not reflect the economies production.explain how income tax affects (i) household savings (ii) business investmentWhich of the following represents a transfer payment? a. You transfer $1,000 from your bank account to a mutual fund. b. The government sends your grandfather his Social Security check. c. You make a payment to get legal documents showing you purchased a previously owned home. d. Your employer automatically transfers $100 each month from your wages to a non-taxable medical spending account.
- How does an increase in government borrowing affect the equilibrium interest rate in the market for loanable funds?Suppose the government borrows $20 million more next year than this year. How does the elasticity of the supply of loanable funds affect the size of these changes? How does the elasticity of the demand of loanable funds affect the size of these changes?how purchasing power is elaborated in economics through budget lines