Government spending - policy to overcome the recession, Business Economics

The government spending on given goods and several services including public. This is government spending on state-provided goods and services including public and merit goods. Decisions on how much the government will spend each year are affected by developments in the economy and also the changing political priorities of the government. In a normal year, government purchases of goods and services accounts for around twenty per cent of aggregate demand. We will return to this again when we look at how the government runs its fiscal policy.

Transfer payments in the form of welfare benefits (e.g. state pensions and the job-seekers allowance) are not included in general government spending because they are not a payment to a factor of production for any output produced. They are simply a transfer from one group within the economy (i.e. people in work paying income taxes) to another group (i.e. pensioners drawing their state pension having retired from the labour force, or families on low incomes.

The next two components of aggregate demand relate to international trade in goods and services between the UK economy and the rest of the world.

As the Government going through the recession. They will have to cut down their everyday expenditure. If the government raised spending then they will have to borrow more and will have to spend more on every department as like education, health, transportation etc.

So by decreasing the net supply of money into these departments then they won't have to borrow a lot of money from the banks and to pay a lot of interest rates.

Posted Date: 3/2/2013 4:50:51 AM | Location : United States







Related Discussions:- Government spending - policy to overcome the recession, Assignment Help, Ask Question on Government spending - policy to overcome the recession, Get Answer, Expert's Help, Government spending - policy to overcome the recession Discussions

Write discussion on Government spending - policy to overcome the recession
Your posts are moderated
Related Questions
#discuss the theory of costs in relation to business operations.you should identify different types of costs and explain how the supply curve is constructed for an organisation?

Procedure for export under deferred paymet

Problem 1: (a) The Mauritian government is now increasingly involving the private sector in the development of the economy. How can government support effective private sector

Are weaknesses of financial markets a problem? Problem: a. Potential entrepreneurs require funds to finance new projects. Financial institutions, as like banks, are middle

The following represents the potential outcomes of your first salary negotiation after graduation: Assuming this is a sequential move game with the employer moving first, indicate

I want a presentation on Saudi Arabia''s economic forecast for 2018 to 2020 and role and future of travel industry in it.

What are the problems of Environment in Economic Growth? Environment Problem: Economic growth can damage the environment by: • Negative externalities as an example waste thr

What is an alternative process strategy to the assembly line that Wheeled Coach currently uses?

Compute the experience curve: Chuck Raverty, General Manager of Carey Builders, a Baltimoreconstruction company is considering bidding for a construction contract on the new

#questDuring the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in ter