Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 4, Problem 8E
To determine
If household and government can spend more than their earnings then what is the difference between these two? The ratio of government spending to GDP. The ratio of payments on debt (interest payment) to GDP.
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If the U.S. government wanted to, it could just say that everyone who is unemployed is “employed in the job search” and receiving a paycheck for this “work,” and the government could claim that these government employees are producing “job search services.” Recall that in the official definition of GDP, government purchases(G), do not include transfer payments like unemployment checks and Social Security.
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