Government purchases are spending by the government on goods, services, and factors of production. Government expenditures represent total government spending including goods, services, grants to state and local governments, and transfer payments. Since the 1950s, total government expenditures, as a percentage of GDP, have increased and total government purchases, as a percentage of GDP, have decreased . The major cause of these trends is A. there has been a major increase in the amount of transfer payments the government makes through programs such as Social Security and unemployment insurance. B. there has been a decrease in income tax rates for most households in the U. S. C. there has been a reduction in the nominal amount of government purchases on military as the U. S. does not engage in military conflicts. D. All of the above. Click to select your answer.

A. there has been a major increase in the amount of transfer payments the government makes through programs such as Social Security and unemployment insurance.

Explanation:

Since the 1950s, the US government budget for Transfer Payments to Social Security Programs and Unemployment benefits has increased tremendously.

The main transfer payments are Disability and Pension/ Retirement payments and they have been on the rise since the 50s.

These Transfer Payments are both a show of Humanitarianism as well as a form of Economic Investment as they help stimulate the Economy during times or Economic Distress by pouring money into it.

A typical example would be the $1,200 that Congress voted to provide direct cash payments of which totaled around $250 billion in March this year to help Americans who were hit hard by the lockdowns that have crippled much of the American economy.

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