Measuring economic - GDP ( Gross Domestic Product) - GOvernment Purchases

4 important questions on Measuring economic - GDP ( Gross Domestic Product) - GOvernment Purchases

What is included in GDP when the government purchases goods and services?

Fighter jets, paying teachers, and office supplies are included in GDP.

Which types of government payments are excluded from GDP?

Transfer payments, such as social security and food stamps, are excluded.

Why is interest on government debts excluded from GDP calculations?

Interest payments do not purchase goods or services, therefore excluded from GDP.
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What happens to money during transfer payments by the government?

Money is moved from one group to another without buying new items.

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