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September 23, 2023, 12:34:44 am

Author Topic: Government Expenditure & Tax  (Read 952 times)  Share 

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Government Expenditure & Tax
« on: April 13, 2012, 05:36:20 pm »

Does anyone know what is Government Expenditure and what it consists of?



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Re: Government Expenditure & Tax
« Reply #1 on: April 13, 2012, 05:40:19 pm »
Government spending (or government expenditure) includes all government consumption, investment but excludes transfer payments[1] made by a state. Government acquisition of goods and services for current use to directly satisfy individual or collective needs of the members of the community is classed as government final consumption expenditure. Government acquisition of goods and services intended to create future benefits, such as infrastructure investment or research spending, is classed as government investment (gross fixed capital formation), which usually is the largest part of the government gross capital formation. Acquisition of goods and services is made through own production by the government (using the government's labour force, fixed assets and purchased goods and services for intermediate consumption) or through purchases of goods and services from market producers. Government expenditures that are not acquisition of goods and services, and instead just represent transfers of money, such as social security payments, are called transfer payments. Government spending can be financed by seigniorage, taxes, or government borrowing.

PhD @ MIT (Economics).

Interested in asset pricing, econometrics, and social choice theory.