AP Macro
What is the present value of $110 paid one year from now if the interest rate is 10%?
$100
Suppose that the Federal Reserve buys $400 billion worth of government securities from the public. If the required reserve ratio is 20 percent, the maximum increase in the money supply is
$2,000 billion
Year Current or nominal GDP GDP price deflator index (2000 = 100) GDP price deflator index (2010 = 100) 2000 $500 100 2010 $1,200 200 100 The value of the gross domestic product in 2010, in terms of 2000 prices, was
$600.
You plan to stay in a hotel for one week on your senior trip to Cancun, Mexico. The total cost is 7000 pesos. With an exchange rate of 11 pesos per dollar, what is the cost of your hotel in U.S. dollars?
$636.36
Corn Cotton Egypt 400 bushels 500 bushels Venezuela 300 bushels 200 bushels In the absence of international trade, the opportunity cost of producing one bushel of cotton in Egypt is
0.8 bushels of corn.
If the Consumer price index rises from 300 to 333 in a particular year, the rate of inflation in that year is:
11%
If the legal reserve requirement is 25%, the value of the simple deposit expansion multiplier is
4.
Year Current or nominal GDP GDP price deflator index (2000 = 100) GDP price deflator index (2010 = 100) 2000 $500 100 2010 $1,200 200 100 If 2010 were made the base year for the GDP price deflator index, the value of the index number for 2000 (rounded to the nearest whole number) would be
42
The full-employment unemployment rate in the economy would be:
7%
Which of the following will not change the demand for oranges?
A change in the price of oranges
Which of the following combinations of policies is designed to decrease inflation?
A decrease in government spending and an open-market sale of government securities
Which of the following combinations of policies is designed to decrease inflation?
A decrease in government spending and an open-market sale of government securties
Which of the following will not cause the demand curve for athletic shoes to shift?
A decrease in the price of athletic shoes
Assume that the demand for apples is downward sloping. If the price of apples falls from $0.80 per pound to $0.65 per pound, which of the following will occur?
A larger quantity of apples will be demanded
Which of the following people would be considered unemployed?
A person who stayed at home to raise his children and now starts looking for a job
Which of the following would best portray long-run economic growth?
A rightward shift of the long-run aggregate supply curve
Assume that in graph 1 the economy is in intial equilibrium where AD1 and AS intersect and assume in graph 2 that the economy is initially at point C. In graph 2, a movement from point C to point A compared with a movement from point C to point B would most likely be associated in graph 1 with a shift from:
AD1 to AD3
If exchange rates are allowed to fluctuate freely and the U.S. demand for Japanese yen increases, which of the following will happen?
Americans will have to pay more for Japanese goods.
A commercial bank holds $500,000 in demand deposit liabilities and $120,000 in reserves. If the required reserve ratio is 20%, which of the following is the maximum amount by which this single commercial bank and the maximum amount by which the banking system can increase loans?
Amount created by single bank- $20,000 Amount created by banking system- $100,000
The theory of rational expectations implies which of the following?
Attempts to decrease unemployment through government policy will be thwarted by people's reactions.
Corporate profits increase; as a result, government collects more corporate income taxes
Automatic and Contractionary
During periods of inflation, wages continue to rise, resulting in an increase in income taxes paid to both national and state levels of government.
Automatic and Contractionary
Incomes rise; as a result, people pay a larger fraction of their income in taxes.
Automatic and Contractionary
Because of a recession, the number of people qualifying for food stamps increases.
Automatic and Expansionary
specializes by producing the commodity for which it has a comparative advantage and then trades with the other country. Which of the following is most likely to result?
Both countries will become better off
In the circular flow diagram, which of the following is true in the product market?
Business firms sell goods and services to households.
Which of the following actions by the Federal Reserve will result in an increase in banks' excess reserves?
Buying bonds on the open market
Automatic stabilizers can do which of the following?
Cause tax revenue to decrease when gross domestic product (GDP) decreases and to increase when GDP increases
Economic planning by central government agencies is primarily associated with
Command economies
If GDP is declining, the economy is most likely in which phase of the business cycle?
Contractionary
The government eliminates favorable tax treatment on long-term capital gains (fancy way of saying savings).
Contractionary Discretionary
Suppose that the price level in Country A increases relative to the price level in other countries. In which of the following ways are Country A's imports and exports most likely to change?
Country A's imports - increase Country A's exports - decrease
The M1 definition of money includes which of the following?
Currency in circulation and demand deposits
With a constant money supply, if the demand for money decreases, the equilibrium interest rate and quantity of demand will change in which of the following ways? Interest Rate Quantity of Money
Decrease Not change
Assume the economy has a low unemployment rate and a high rate of inflation. Which of the following sets of monetary and fiscal policies would be consistent and designed to reduce the rate of inflation?
Discount rate- Increase Government spending- Decrease Open Market Operations- Sell Bonds
Which of the following monetary and fiscal policy combinations would definitely cause a decrease in aggregate demand in the short run?
Discount rate- Increase Government spending- Decrease Open Market Operations- Sell Bonds
The government eliminates the deductibility of interest expense of tax purposes
Discretionary Contractionary
The government raises Social Security taxes
Discretionary and Contractionary
The government raises medicare taxes to afford the Affordable Care Act.
Discretionary and Contractionary
The government launches a major expansion of infrastructure (roads, bridges, etc) spending.
Discretionary and Expansionary
Assume a contractionary monetary policy causes real interest rates in the United States to increase relative to Japan. In the short run, the value of the U.S. dollar, the value of the Japanese yen, and the U.S. balance of trade will most likely change in which of the following ways?
Dollar - appreciate Yen - depreciate US Balance of Trade - Move toward deficit
The main benefit of free trade between two countries is that
Each country can consume beyond its constraints of resources and productivity
Which of the following indicates that the macroeconomy is achieving its economic goals?
Economic growth
The current account and the financial account must do which of the following?
Equal zero when added together
Recession raises the amount of unemployment compensation paid to unemployed workers.
Expansionary Automatic
The theory of comparative advantage implies that Alpha would find it advantageous to
Export grain and import steel
Most of the money in our economy is in the form of currency.
False
The chair of the Federal Reserve is Paul Volker
False
Tight money policy will increase economic activity in our economy.
False
When banks practice fractional reserve banking, most of the money deposited in a bank stays in the bank's vaults.
False
When the Fed sells government securities (bonds) to banks and the public, the money supply in the economy expands.
False
Which of the following would be an example of an intermediate good or service?
Gasoline purchased by an insurance agent to visit clients at their homes
A country's government runs a budget deficit when which of the following occurs in a given year?
Government spending exceeds tax revenue.
Which of the following is the best measure of the production (output) of an economy?
Gross Domestic Product
Which of the following is most likely to increase the velocity of money?
Higher frequency of paychecks
In the circular flow diagram, which of the following is true in resource (factor) markets?
Households sell resources to business firms.
The M1 definition of money includes which of the following? I. Currency II. Demand deposits (checkable deposits) III. Savings accounts and small time deposits IV. Eurodollars
I and II only
Which of the following is/are included in GDP?I. New carII. Marijuana profitsIII. A ticket to the moviesIV. A used car used by a door to door window salesman
I and III only
To be officially unemployed a person must:I. be in the civilian labor forceII. have just lost a job III. be 21 years of age
I only
A demand curve:I. shows the relationship between price and quantity demanded at all pricesII. indicates the quantity demanded at each price in a series of pricesIII. graphs as a down-sloping line
I, II , III
The law of supplyI. reflects the amounts which producers will want to offer at each price in a series of pricesII. is reflected in an upward sloping supply curveIII. shows that the relationship between price and quantity supplied is positive
I, II, and III
True statements about expansionary monetary policy in the long run include which of the following? I. Price level increases to match the increase in the money supply. II. The nominal interest rate equals the real interest rate plus the expected inflation rate. III. The real output level has not permanently increased.
I, II, and III
Which of the following explains why inflation can increase? I. Increase in aggregate demand II. Decrease in aggregate supply III. Increase in rate of money supply growth
I, II, and III
Expansionary monetary policy results in which of the following in the short run? I. The money supply increases. II. The nominal interest rate decreases. III. The real interest rate decreases. IV. Bond prices decrease.
I, II, and III only
Which of the following are considered a nonproductive transaction? I. Mr. Gentile gives his niece $50 for her birthday II. Mrs. Patullo cooks for her family III.Mrs. Arianas is a waitress in the "underground" or blackmarket economy
I, II, and III only
Soda Cheese United States 20 bottles 60 pounds France 10 bottles 40 pounds Which of the following are true statements? I. France has an absolute advantage in producing soda. II. The United States has a comparative advantage in producing soda. III. The United States has an absolute advantage in producing cheese. IV. The United States has a comparative advantage in producing cheese.
II and III only
Which of the following are true statements about the federal funds rate? I. It is the same thing as the discount rate. II. It is the interest rate that banks charge each other for short-term loans. III. It is influenced by open market operations.
II and III only
A recession is defined by which of the following:I. cost-push inflation is presentII. demand-pull inflation is presentIII. real domestic output fallsIV. nominal domestic output fall
III only
A President of the United States promises to simultaneously produce more defense goods without any decreases in the production of other goods. Under which of the following conditions could such a promise be valid?
If the U.S. were producing inside its production possibilities curve.
What does a balance of trade deficit imply?
Imports of goods and services exceed exports of goods and services.
Which of the following combinations of changes in government spending and taxes is necessarily expansionary?
Increase in government spending, decrease in taxes
If the real interest rate in Country X increases relative to the real interest rate in Country Y and there are no trade barriers between the two countries, then for country X which of the following will be true of its capital flow, the value of its currency, and its exports?(Capital Flow) (Currency) (Exports)
Inflow Appreciation decrease
When the unemployment rate is 10% and the CPI is rising at 2%, the federal government cuts taxes and increases government spending. If the Federal Reserve buys bonds on the open market, interest rates, investment, real gross domestic product (GDP) and the price level are most likely to change in which of the following ways?
Interest Rate - Decrease Investment - Increase Real GDP - Increase Price Level - Increase
If the Federal Reserve raises reserve requirements, which of the following is most likely to occur?
Interest rates would increase
Suppose the Federal Reserve buys $400,000 worth of securities from the securities dealers on the open market. If the reserve requirement is 20% and the banks hold no excess reserves, what will happen to the total money supply?
It will expand by $2,000,000.
If the Federal Reserve raises the discount rate, which of the following would most likely occur?
Money supply will decrease.
If a nation's currency appreciates, in the short run its net exports and aggregate demand are most likely to change in which of the following ways?
Net exports - decrease Aggregate demand - decrease
Which of the following purchases is included in the calculation of gross domestic product?
New harvesting equipment for the farm
If the country is currently producing at Point C, it can produce more capital goods by moving in the direction of
Point D
The production possibilities curve of the country would be most likely to shift to the right if the country were currently producing at which of the following points?
Point D
Which of the following will occur in a competitive market when the price of a good is less than the equilibrium price?
Price will increase to eliminate the shortage and restore equilibrium
An increase in which of the following would be most likely to increase long-run economic growth?
Productivity
Which of the following is a regulation that sets the amount of an item that can be imported?
Quota
Which of the following monetary and fiscal policy combinations would most likely result in a decrease in AD? (Discount Rate) (Open-Market Operations) (Government Spending)
Raise Sell Decrease
If expansionary fiscal policies in the United States lead to increased budget deficits, what will happen to real interest rates in the United States and the value of the dollar?
Real interest rate - increase Value of currency - increase
If fiscal policy is used to correct a recessionary gap, which of the following would most likely occur in the absence of crowding out in the short run?
Real output increase, unemployment decrease
Which phase of the business cycle would be most closely associated with an economic contraction?
Recession
Which of the following monetary and fiscal policy combinations would definitely cause an increase in aggregate demand?
Reserve Requirement- Decrease Taxes- Decrease Government spending- Increase
Reserves, the money supply and interest rates are most likely to change in which of the following ways when the Federal Reserve sells bonds?
Reserves - decrease Money Supply- decrease Interest Rates - increase
If a certain combination of goods or services lies outside the production possibilities curve of an economy, which of the following is true?
Resources are not available to achieve that combination of goods or services
If the production possibilities curve of an economy is CD and the economy is producing at Point X, which of the following is true?
Resources are not fully employed.
A country's financial account include which of the following?
Sales of assets to other countries
What will happen to the supply of loanable fund and the equilibrium interest rate if the Federal Reserve buys government securities?
Supply - Increase Interest rate - Decrease
"Because of unseasonably cold weather, the supply of oranges has substantially decreased.". This statement indicates that:
The amount of oranges that will be available at various prices has declined
Which of the following would be counted as investment when calculating gross domestic product?
The construction of a new house
Assume that Country A exports one bushel of wheat in exchange for 2.5 bushels of corn from Country B. If the terms of trade are beneficial to both countries, which of the following must be true?
The cost of producing a bushel of wheat in Country B is greater than 2.5 bushels of corn
Assume that Country A exports one bushel of wheat in exchange for 2.5 bushels of corn from Country B. If the terms of trade are beneficial to both countries, which of the following must be true?
The cost of producing a bushel of wheat in the Country A is less than 2.5 bushels of corn
A country's current account includes which of the following?
The country's trade balance
An expansionary fiscal policy will result in an increase in the interest rate unless which of the following occurs?
The money supply is increased.
Assume that, under a system of floating (also known as flexible) exchange rates, Mexicans decide to increase their investments (savings) in the United States. As a result:
The peso will depreciate and the dollar will appreciate in value.
Which of the following is a microeconomic statement?
The price of wheat declined last year.
If the government increases spending without a tax increase and simultaneously no monetary policy changes are made, which of the following would most likely occur?
The rise in income may be smaller than the multiplier would predict because the higher interest rates will crowd-out private investment spending.
The statement that "the cost of reducing the rate of inflation is that people must lose their jobs" indicates that the speaker believes in a relationship that is usually depicted by which of the following?
The short-run Phillips curve
Which of the following is a positive statement?
The temperature is 92 degrees today.
When the actual inflation rate is greater than the anticipated inflation rate, which of the following is most likely to suffer?
Those who lend at a fixed interest rate
An increase in the price of gasoline will cause the demand curve for tires to shift in which direction?
To the left, because gasoline and tires are complements
Monetary Policy is subject to less political pressure than fiscal policy.
True
If the balance on the current account is zero, which of the following transactions will cause it to go into deficit?
U.S. tourists in Great Britain purchase pounds sterling.
Which of the following transactions represents a deficit in the current account of the U.S. balance of payments?
U.S. tourists in Great Britain purchase pounds sterling.
If the U.S. dollar appreciates in the foreign exchange market, U.S. imports and exports are most likely to change in which of the following ways?
US imports - increase US exports - decrease
Which of the following is at its highest at the trough of a business cycle?
Unemployment
Which of the following characteristics of money could be found in bars of gold?
Uniformity and durability
According to the graph above, which of the following statements about the economy is true?
Wages will eventually decrease, restoring full employment in the long run.
The money market is definitely in equilibrium in which of the following cases?
When the quantity of money demanded equals the quantity of money supplied.
If the demand for good Y increases as the price of good X decreases, it can be concluded that
X and Y are complementary goods
All of the following might reasonably be expected to shift the demand curve for beef to a new position except
a decrease in the price of beef
Which does not contribute to the production of the domestic output of an economy?
a full-time student
A rightward shift of the Phillips Curve suggests that:
a higher rate of unemployment is associated with each inflation rate.
A college graduate using the summer following graduation to search for a job would best be classified as:
a part of frictional unemployment
United States exports, foreign travel in the United States, and foreign capital inflow into the United States give rise to:
a supply of foreign currencies to the United States.
If the price index in a country were 100 for the year 2010 and 120 for the year 2015 and nominal gross domestic product in 2015 was $480 billion, then real gross domestic product for 2015 in 2010 dollars would be
about $400 billion.
The US's economy is generally considered to be at "full employment" when:
about 3 to 4 percent of the labor force is unemployed
GDP is the market value of:
all final goods and services produced in an economy in a given year.
Producer surplus is the
amount the seller is paid less the cost of production.
Adding the market value of all final and intermediate goods and services in an economy in a given year would result in:
an amount greater than GDP for that year.
An expansionary monetary policy may promote long-run growth if it leads to
an increase in investment.
A leftward shift of a product supply curve might be caused by:
an increase in the prices of needed inputs
An increase in Japan's demand for US good would cause the value of the dollar to
appreciate because Japan would be buying more US dollars
If a contractionary monetary policy raises interest rates in the US, what will happen to the value of the US dollar, the value of the Japanese Yen, and the US balance of trade? (Dollar) (Value of Yen) (Balance of Trade)
appreciate depreciate toward deficit
If a contractionary monetary policy raises interest rates in the US, what will happen to the value of the US dollar, the value of the Japanese Yen, and the US balance of trade?(Dollar) (Value of Yen) (Balance of Trade)
appreciate depreciate toward deficit
Which of the following statements is correct? Unanticipated inflation
arbitrarily "taxes" fixed-income groups
An example of an intermediate good or service would be:
bricks bought by a contractor for constructing a patio.
To counter the crowding-out effect on interest rates caused by the government's deficit spending, the Federal Reserve can
buy bonds through open market operations.
When the Federal Reserve bank uses their open-market operations, they are:
buying or selling government bonds.
In the gross domestic product, the largest dollar amount is
consumer spending.
Hyperinflation is typically caused by
continuous expansion of the money supply to finance government budget deficits.
To reduce inflation, the Federal Reserve could
contract the money supply in order to raise interest rates, which decreases investment.
When a U.S. importer buys 100,000 pairs of pants from a Hong Kong company, this transaction will be a:
debit on the current account of the U.S. balance of payments.
In a flexible system of exchange rates, an open market sale of bonds by the Federal Reserve will most likely change the money supply, the interest rate and the value of the US dollar in which of the following ways? (Money supply) (Interest rates) (Value of the dollar)
decrease increase increase
The crowding-out effect works through interest rates to:
decrease the effectiveness of expansionary fiscal policy.
If the demand for a good or service decreases, the equilibrium price and quantity are most likely to change in which of the following ways? Price/ Quantity
decrease/ decrease
Real income can be determined by:
deflating nominal income for inflation
Changes in government spending and tax revenues for the purpose of achieving a full-employment and noninflationary level of domestic output is called:
fiscal policy.
An example of a final good in national income accounts would be new:
flowers purchased by homeowner Lenny Davis.
Kimberly voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kimberly presently is:
frictionally unemployed
In the circular flow model, profits flow between which two sectors (markets are not considered sectors)?
from firms to households
The market value of all final goods and services produced in the economy in a given year is
gross domestic product.
If the government increases spending without a tax increase and simultaneously no monetary policy changes are made, which of the following would most likely occur?
he rise in income may be smaller than the multiplier would predict because the higher interest rates will crowd-out private investment spending.
In the resource market:
households sell resources to businesses.
Given the aggregate demand and aggregate supply curve shown above, if policy makers want to increase real output without causing inflation, they can pursue a policy that will
increase aggregate supply only.
Given the aggregate demand and aggregate supply curves shown above, if policy makers want to increase real output without causing inflation, they can pursue a policy that will
increase aggregate supply only.
Suppose a factory added $5,000 worth of output this year. Incidentally, the waste from this factory caused $1,000 worth of loss to the neighboring waterways. As a result, gross domestic product will
increase by $5,000.
New costly regulations to protect workers are introduced in the production of Twinkies. Which of the following indicates the changes in the price and quantity of Twinkies? (Price of Twinkies) (Quantity of Twinkies)
increase decrease
Which of the following changes will occur to the demand for US dollars and the international value of the dollar in the short run if investors in the US and abroad increase their purchases of US government bonds? (Demand for Dollar) (International Value of Dollar)
increase increase
With an upward-sloping shirt-run aggregate supply curve, an increase in government expenditure will most likely
increase real gross domestic product.
With an upward-sloping short-run aggregate supply curve, an increase in government expenditure will most likely
increase real gross domestic product.
Which combination of fiscal policy actions would be most contractionary for an economy experiencing severe demand-pull inflation?
increase taxes and decrease government spending.
Which combination of fiscal policy actions would most likely be offsetting?
increase taxes and increase government spending
An increase in U.S. real interest rates relative to the rest of the world can be expected to
increase the international value of the dollar.
If there is an increase in demand for a good, what will most likely happen to the price and quantity of the good exchanged? Price/ Quantity
increase/ increase
Trade between individuals and between nations leads to:
increased specialization.
Which are contractionary fiscal policies?
increased taxation and decreased government spending.
The crowding-out effect suggests that:
increases in government spending may raise the interest rate and thereby reduce investment.
The neutrality of money refers to the situation where
increases in the money supply eventually result in no change in real output.
The Phillips curve shows the relationship between
inflation and unemployment.
The traditional Phillips Curve shows the:
inverse relationship between the rate of inflation and the unemployment rate.
The asset demand for money and the rate of interest are:
inversely related.
A peak in the business cycle
is a temporary maximum point.
The major difference between nominal and real GDP is that real GDP
is adjusted for price-level changes using a price index
When the United States government engages in deficit spending, that spending is primarily financed by
issuing new bonds
Suppose that a typical consumer buys the following quantities of three commodities in 1993 and 1994. Commodity Quantity 1993 per Unit price 1994 per unit price Food 5 units $ 6.00 $ 5.00Clothing 2 units $ 7.00 $ 9.00Shelter 3 units $ 12.00 $ 19.00 Which of the following can be concluded about the consumer price index (CPI) for this individual from 1993 to 1994?
it increased by 25 %
According to the theory of comparative advantage, a good should be produced where
its opportunity costs are least.
To be considered scarce, an economic resource must be
limited and desirable, but not free.
Which of the following is true of an import quota? It
limits quantity of imports allowed into a country.
If a nation chooses to specialize and trade, which of the following situations could be expected to occur?
lower prices
A bank "creates" money when it:
makes a loan.
When money is used as a standard of value, a person is
making price comparisons among products.
Given a fixed Phillips Curve with stable and predictable inflation and unemployment rate tradeoffs, it appears that:
manipulating aggregate demand through fiscal and monetary policies has the effect of causing a movement along the curve.
A person states that: "A large public debt will bankrupt the United States government." An economist is likely to respond:
no, because the government can refinance the public debt by selling new bonds.
The real interest rate is simply stated as the
nominal interest rate minus the expected inflation rate.
The value of the best alternative forgone when a decision is made defines
opportunity cost
When one decision is made, the next best alternative not selected is called
opportunity cost
A basic assumption of the two-nation production possibilities curves that are straight lines is that:
opportunity costs are constant.
According to the principle of comparative advantage, worldwide output and consumption levels will be highest when goods are produced in nations where which of the following are true?
opportunity costs are lowest
The rate of economic growth is best defined as the:
percentage increase in real GDP over time.
The law of increasing opportunity cost is reflected in the shape of the
production possibilities curve concave to the origin.
When inflation is running high, proper monetary policy would be to:
raise the reserve requirement.
The long-run growth rate of an economy will be increased by an increase in all of the following EXCEPT
real interest rate
If Congress and the Federal Reserve both wished to encourage growth of productive capacity in an economy already close to full employment, it would be most appropriate to
reduce interest rates by engaging in open-market operations and raise taxes on personal income.
A government economist states that: "The collection of personal income tax revenues automatically falls during a recession." This statement best describes how the progressive income tax system:
serves as an automatic stabilizer for the economy.
If the Federal Reserve undertakes a policy to reduce interest rates, international capital flows will be affected in which of the following ways?
short run capital inflows to the US will decrease
Which of the following does not belong with the others?
taxes
If other things are held constant, an increase in the United States imports will
tend to cause the dollar to depreciate because the world supply of dollars will rise
Monetary policy in the United States is the responsibility of:
the Federal Open Market Committee.
The United States national debt is
the amount of money owed to holders of United States securities.
The opportunity cost of producing an additional unit of product J is
the amount of product K that could have been produced with the resources used to make the unit of J.
According to the graph above, if Canadians buy more U.S. goods, then:
the demand curve will increase.
During a serious recession we would expect output to fall the most in:
the machine tool industry used on capital equipment
Unanticipated inflation helps borrowers because:
the money they pay back has less purchasing power than the money that was borrowed
Suppose there are 10 million part-time workers and 90 million full-time workers in an economy. Five million of the part-time workers switch to full-time work. We can conclude that:
the official unemployment rate will be unchanged.
In the market for artichokes, if the surgeon general announces that eating an artichoke a day dramatically reduces one's likelihood of developing cancer. Simultaneously an infestation of the artichoke weevil severely damages the crop. Which of the following will definitely occur as a result?
the price of artichokes will increase
In presenting the notion of a demand curve, economists presume that the most important variable in determining the quantity demanded is:
the price of the product itself
When government spending is increased, the amount of the increase in aggregate demand primarily depends on:
the size of the multiplier.
An example of a public transfer payment is a(n):
veteran's benefit payment.