How does the government budget affect the economy?
Anjaree is right. Government budgets in economics terms are associated with balancing spending and revenue, so if the government overspends during 1 term, it will have to tax more in the future to pay for historical spending… obviously taxation affects incomes of people, government spending leads to multiplier effects depending WHAT the money is spent on. On the political front. A budget is basically how much departments GET. So when different departments are assigned different costs, it affects the economy drastically depending on what department and what services are offered. I.e. If Obama were to reduce spending in the arms forces to $1 and pump it all into healthcare; you would get a lot of healthcare possibly for all Americans, increased health and the general positive externalities associated with that, but perhaps the Chinese would think America is weak with a $1 military budget and invade or something. Or if the government budget for unemployed welfare or unemployed skills re
in some of the era after the war the world economic system is most influenced by the state and private sector as one where the state economic controls to make a budget to build the economy of a country, have not been implemented keyness that nothing in this world economic system without the intervention of a state, positive impact of a government’s budget is able to manage all household expenditure countries, can control the use of foreign exchange, as the supporting facilities and infrastructure of government and the people, encouraging economic growth, and the latter encourages public trust in government sector
