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What are the principal difference between government purchases of goods and services and transfer payments?
Government spending on goods and services is like individual spending or corporate spending for goods delivered and services received.
Transfer payments are made by governments to individuals or corporations without expectation of receiving either a physical product or a service in return.
Examples include:
- Payments to disabled people which allow them to survive despite having no way to earn an adequate income
- Payments "earned" or expected via "social contract" such as Social Security payments
- Payments which have the effect or dampening the impact of localized disasters. Disaster relief and similar payments are seen as a form of "fair" distribution of the harm from random events or simply because the public wants to achieve some form of fairness.
- Payments to farmers and farming corporations to get them to NOT grow certain crops (unless you see not growing something to be a "service")
- Payments made simply because a special interest group had the money and clout to influence legislation in their favor.
What else can I help you with?
Government purchases in national income accounts would include expenditures for payments of?
Social securiy
What is the difference between expropriation and confiscation?
expropriation means seizure of private property by the government after paying compensation. confiscation is similar as expropriation, but confiscation does not involve such payments.
Do bonds represent ownership in a company?
No, bonds do not represent ownership in a company. Instead, they are a form of debt where investors lend money to a company or government in exchange for regular interest payments and the return of the principal amount at a specified maturity date.
Why are transfer payments not included as a government expenditure when calculating GDP?
no, because they are not payments for currently produced goods or services.
Government payments to protect or encourage economic activity?
Subsidy
Transfer payments are excluded from government purchases in GDP accounting because?
they are difficult to measure
Government purchases in national income accounts would include expenditures for payments of?
Social securiy
What journals do you use to record purchases on account purchases for cash and cash payments?
Purchases journal is used to record purchases on account while Cash payment journal is used to record purchases for cash and cash payments.
What is the difference between additional escrow and additional principal payments on a mortgage?
Additional escrow payments are extra funds paid into an account to cover property taxes and insurance, while additional principal payments are extra funds paid directly towards the loan balance, reducing the overall amount owed on the mortgage.
Explain how loan supports and deficiency payments work?
Deficiency payments are government payments to compensate farmers for all or part of the difference between producer prices
What is the difference between the principal balance and the outstanding balance on a loan?
The principal balance is the original amount borrowed, while the outstanding balance is the amount still owed on the loan after payments have been made.
What is the difference between making biweekly mortgage payments and making extra principal payments?
Making biweekly mortgage payments involves paying half of your monthly mortgage payment every two weeks, resulting in 26 half payments per year instead of 12 full payments. This can help you pay off your mortgage faster and save on interest. On the other hand, making extra principal payments involves paying additional money towards the principal balance of your mortgage, which can also help you pay off your mortgage faster and save on interest. In summary, the difference is in the frequency and structure of the payments, but both methods can help you save money and pay off your mortgage sooner.
What is the difference between amortizing and interest-only loans?
Amortizing loans involve regular payments that reduce both the principal amount and interest over time, while interest-only loans require only interest payments for a set period before the principal is paid off in full.
Do large principal payments reduce monthly payments?
Large principal payments do not reduce monthly payments. Monthly payments are typically fixed based on the loan amount and interest rate, so making a large principal payment will not change the monthly payment amount. However, paying off a large portion of the principal can help reduce the total interest paid over the life of the loan and shorten the loan term.
Can you make principal payments on credit cards?
No, you cannot make principal payments on credit cards. Credit card payments are typically applied towards the total balance owed, including interest and fees, rather than specifically towards the principal amount.
How can you lower the principal owed on your mortgage?
You can reduce the principal by making extra payments toward the principal each payment cycle. Ask your lender how best to do it and make certain the amount is deducted from the principal.You can reduce the principal by making extra payments toward the principal each payment cycle. Ask your lender how best to do it and make certain the amount is deducted from the principal.You can reduce the principal by making extra payments toward the principal each payment cycle. Ask your lender how best to do it and make certain the amount is deducted from the principal.You can reduce the principal by making extra payments toward the principal each payment cycle. Ask your lender how best to do it and make certain the amount is deducted from the principal.
Do extra payments automatically go to the principal balance?
No, extra payments do not automatically go to the principal balance. Some lenders may apply extra payments towards future payments or interest first. It's important to check with your lender to understand how they apply extra payments.
