Read the two statements and choose the correct option.
I. Government final consumption expenditure includes the salaries of government employees.
II. Government final consumption expenditure includes old-age pensions.

Only ICorrect answerYour answerOnly IICorrect answerYour answerBoth I and IICorrect answerYour answerNeither I nor IICorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Salaries pay for services the government provides, such as teaching and policing, so I is true.
Pensions are transfer payments, not purchases of goods or services, so II is false.

Ten questions from Measuring National Income, at your own pace.

Ten questions from Measuring National Income, at your own pace.

Read the two statements and choose the correct option.I. Government final consumption expenditure includes the salaries of government employees.II. Government final consumption expenditure includes old-age pensions.