: What is the difference between federal government purchases (spending) and federal government expenditures?
Which of the following is the correct answer, and why?
A. Government expenditures are included in government purchases.
B. Government purchases are included in government expenditures.
C. Government purchases refer to spending for which no good or service is received.
D. They are the same.
Answers and Views:
Answer by nineball
B. Government purchases are included in government expenditures
Purchases are the items bought; expenditures are the finances used for any outgoing transaction (the costs or the transaction itself). Many expenditures do not purchase a physical item. E.g., a soldier’s wages is an expenditure but the soldier was not purchased. Another example: donating money to another country is an expenditure on the government fiscal books but nothing was purchased.
On the other hand, purchases are included in expenditures.
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