Complete Question:
Government spending influences the economy by:
Group of answer choices.
A. influencing the brands of products the country is allowed to produce.
B. deciding on the prices for goods available to consumers.
C. setting the salaries for employees in all private industries.
D. determining which government programs get the most funding
Answer:
D. determining which government programs get the most funding
Explanation:
Government spending (expenditures) can be defined as money spent by the government (federal, state and local) for the purchase of goods and provision of services such as security, healthcare, electricity, water, education, transportation, agriculture, etc.
Basically, government spending (expenditures) is financed through two (2) main sources and these include;
I. Taxation.
II. Borrowing.
Generally, government spending (expenditures) influences the economy by determining which government programs such as healthcare, education, road construction, social welfare, etc., would get the most funding.
In Economics, fiscal policy can be defined as the use of government spending (expenditures) and revenues (taxation) to influence macroeconomic conditions such as Aggregate Demand (AD), inflation, and employment within a country. Fiscal policy is in relation to the Keynesian macroeconomic theory by John Maynard Keynes.
A fiscal policy affects combined demand through changes in government policies, spending and taxation which eventually impacts employment and standard of living plus consumer spending and investment.
