A government enacts a new fiscal package with the following components: $200 billion allocated to building new public highways, $75 billion to increase the salaries of government employees, and $125 billion in unemployment benefits paid directly to households. Based on the expenditure approach to calculating national output, what is the immediate, direct increase in the government purchases component ('G')?

Analyzing a Fiscal Stimulus Package

Comparative Analysis of Government Expenditures

Distinguishing Government Outlays in National Accounts

An economist is analyzing the impact of various government fiscal actions on the national economy. Match each government action to its correct classification within the expenditure approach to calculating national output.

If a country's government doubles its total budgetary outlays, with the entire increase allocated to pension payments for retired citizens, the government purchases component ('G') of its national output will also approximately double.

Identifying an Error in National Output Calculation

A government announces a new fiscal plan. It will spend $100 billion on building new public schools and will also issue a one-time $80 billion tax rebate to households. Economic analysis suggests that households will spend 75% of this rebate and save the rest. What is the total initial impact on aggregate demand from both of these actions combined?

To avoid double-counting in the calculation of a nation's total economic output, payments made by the government directly to individuals without any good or service being produced in return, such as social security checks, are not included in the government purchases category. Instead, they are accounted for within the ________ category once the recipients spend the money.

Evaluating Government Economic Impact

Government Spending as a Share of GDP: An International Comparison