Okuzeka
Economics vocabulary · Fiscal Policy and Public Finance

Government spending

Meaning in economics, with examples

nounCore term

In economics, government spending means: Money that the state spends on public services, investment, salaries and social payments such as pensions; a key tool of fiscal policy.

In Turkish: kamu harcamaları, devlet harcamaları

How it is used

Also public spending or public expenditure. Governments increase, cut or rein in spending. In the GDP formula C + I + G + NX, G covers only government purchases of goods and services, not transfers such as pensions.

Example sentences

  1. Government spending on health and education rose faster than tax revenue.

  2. To cut the deficit, the finance ministry plans to rein in government spending next year.

Common collocations

  • cut government spending
  • increase government spending
  • public spending
  • spending cuts
  • government spending on
  • fiscal policyThe government's decisions about taxes and public spending, used to influence demand, growth, jobs and the state of the public finances.
  • taxationThe system by which a government collects money from people and businesses through taxes on income, profits, spending and property.
  • budget deficitThe gap that appears when a government spends more than it collects in taxes and other revenue during a year; it is usually covered by borrowing.
  • austerityA policy of sharply cutting government spending, and sometimes raising taxes, in order to reduce a budget deficit or public debt.
  • stimulusExtra government spending, tax cuts or central bank support designed to increase demand and lift a weak economy.

More terms: Fiscal Policy and Public Finance

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