Government spending influences the economy

• Government spending


  One way that the government influences the economy
• Government spending on things like social services, health and education


  Pumps money into the econo
• Changes in government spending

  Affect firms within the economy controlled by that government
• Changing government expenditure on welfare benefits


  Has a quick impact on the economy, because people who receive benefits will instantly have more (or less) money available to spend, which means that businesses may see demand for their products go up (or down)
• Government spending on infrastructure such as roads

  Has a slower effect on the economy. This spending can improve supply routes for businesses so that they can get things like raw materials faster and more cheaply. It can also increase customer access to businesses, so demand could increase