A national government pays the salary of a meteorologist who works for the national weather agency. How is this payment classified within the government's outlays?

Analyze each of the following government actions and match it to the correct category of government outlay.

Distinguishing Government Expenditures and Transfer Payments

Analyzing a Government's Annual Budget

A government's payment of unemployment benefits to a laid-off worker is classified as an expenditure on goods and services because the payment stimulates economic activity.

Categorizing Interest on Government Debt

Classifying a Government Subsidy Program

A government increases its total outlays by $100 million. Which of the following actions represents a government expenditure on goods and services, distinguishing it from a transfer payment or an interest payment?

Critiquing a Political Statement on Government Spending

A government is considering two policy options, each costing $50 billion.

• Option A: Give a $50 billion grant to a private corporation to support its research and development, with no specific product or service delivered directly to the government in return.
• Option B: Spend $50 billion to hire contractors to build new public highways and bridges.

Which statement best evaluates these two options according to the principles of classifying government outlays?