2.2.4: Government Expenditure

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Created by
Kendrick Lamar

Cards (7)

  • Government Expenditure: Amount of money the government spends on goods and services
  • Government Expenditure is a component of Fiscal policy
  • Government Expenditure can be used to change the level of AD, provide public goods, correct market failures, and increase growth in specific regions
  • Budget deficit: Government spending > Tax revenue
  • Budget surplus: Government spending < Tax revenue
  • Budget balance: Government spending = Tax revenue
  • During a recession, the government spends more on welfare benefits and supporting business