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.

Government Purchases

Expenditures made by the government for goods and services that directly satisfy the needs of the community or are used to provide public services.

Transfer Payments

These are payments made by the government to individuals, without the government receiving any goods or services in return, such as welfare or social security.

Resources

Assets, materials, or inputs used in the production of goods and services.