To Encourage Formation of Small Businesses, the Government Could Provide

Multiple Choice

To encourage formation of small businesses, the government could provide subsidies. How would these subsidies be treated?

A) They would be included in GDP because they are part of government expenditures.
B) They would be included in GDP because they are part of investment expenditures.
C) They would not be included in GDP because they are transfer payments.
D) They would not be included in GDP because the government raises taxes to pay for them.