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Module 1: Economic activity

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Government Capital/Investment Expenditure (G2)

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Economics - Government Capital/Investment Expenditure (G2)

Government Capital/Investment Expenditure (G2)

This is spending by the government on capital goods. The majority of is on
infrastructure. provides the framework that will encourage greater
spending. accounts for about five per cent of aggregate demand and, while
more volatile than is still considered relatively stable.

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You should note that transfer payments [1] made by the government,
including unemployment benefits and the aged pension, are not included in
either or because they are not a payment for a good or service. Transfer
payments do, however, increase disposable income, so they therefore
influence .

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[1] http://alison.com/#