1. What is the difference between government expenditures and

government purchases? How do the two variables differ in terms of

their effect on GDP?

2. Federally funded student aid programs generally reduce benefits by $1

for every $1 that recipients earn. Do such programs represent

government purchases or transfer payments? Are they automatic

stabilizers?

3. Crowding out reduces the degree to which a change in government

purchases influences the level of economic activity. Is it a form of

automatic stabilizer?