Government spending can affect economic growth from "summary" of Public Finance by Harvey S. Rosen
Government spending plays a crucial role in shaping the overall economy. When the government spends money on programs and projects, it can have a direct impact on economic growth. For example, government spending on infrastructure projects such as roads, bridges, and public transportation can create jobs and stimulate economic activity. This, in turn, can lead to increased consumer spending and business investment, further boosting economic growth.
Moreover, government spending can also influence economic growth indirectly through its impact on aggregate demand. By increasing government spending during times of economic downturn, the government can help stimulate demand and prevent a recession. This is especially important when monetary policy alone is...
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