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Government Expenditures

Definition

Government expenditures refer to the money spent by the government on goods, services, and programs to fulfill its responsibilities and meet the needs of the public. This includes spending on areas such as defense, education, healthcare, infrastructure, and social welfare.

Analogy

Government expenditures can be likened to a household budget. Just like how a family allocates money for various expenses like groceries, utilities, and education, the government allocates funds for different sectors to provide essential services and support public welfare.

Related terms

Transfer Payments: These are payments made by the government to individuals or households without any corresponding goods or services being provided in return. Examples include Social Security benefits or unemployment compensation.

Capital Expenditures: These refer to government spending on long-term investments in physical assets like buildings, roads, bridges, or equipment that will provide benefits over an extended period.

Mandatory Spending: This refers to government spending that is required by law and not subject to annual appropriations. It includes entitlement programs like Medicare or interest payments on national debt.