Government purchases and transfer payments:

A) differ because the latter absorb resources while the former do not.
B) differ because the former absorb resources while the latter do not.
C) are alike because both are more inflationary than private spending.
D) are alike because both absorb resources.

Transfer Payments

Payments made by governments to individuals or other entities without requiring a good or service in return, such as welfare or social security payments.

Government Purchases

Expenditures by the government sector on final goods and services in a given period.

Resources

Assets or inputs used in the production of goods and services, such as land, labor, capital, and entrepreneurship.