Principles of Macroeconomics / Unit 3 MAC 0205 short lesson, about 20 seconds
Government Purchases and Transfer Payments
Captions available
The idea
Government purchases are spending on goods and services at every level of government. Transfer payments are excluded, because nothing is produced in return.
In practice
A teacher's salary counts; a pension payment does not.
Where people slip
The pension is counted later, when the recipient spends it on something that was produced.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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