Question

U.S. federal government expenditures are comprised of purchases of goods and services​ (defense spending plus spending on all​ day-to-day activities), transfer​ payments, interest​ payments, and grants to state and local governments. Which of the following statements is​ true?

Answer 1

Transfer payments are the largest component of the federal budget​ (about 50%) followed by defense spending​ (about 20%), while spending on all its​ day-to-day activities is the smallest component​ (about ​8%).