GOVERNMENT EXPENDITURES: Spending by the government sector including both the purchase of final goods and services, or gross domestic product, and transfer payments. Government expenditures are used by the government sector to undertake key functions, such as national defense and education. These expenditures are financed with a combination of taxes and borrowing.

     See also | government purchases | government borrowing | consumption expenditures | investment expenditures | net exports | taxes | investment | saving | investment borrowing | government sector | government functions | public sector | stabilization policies | macroeconomics | circular flow | business cycles | economic goals | macroeconomic sectors | macroeconomic markets | macroeconomic problems | macroeconomic theories | determinants | political views | ownership and control | political business cycles | property rights |

GOVERNMENT EXPENDITURES, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 5, 2025].

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A macroeconomic model relating the price level and real production under the assumption that ALL prices are flexible. This is one of two aggregate market submodels used to analyze business cycles, gross production, unemployment, inflation, stabilization policies, and related macroeconomic phenomena. The other is the short-run aggregate market. The long-run aggregate market isolates the interaction between aggregate demand and long-run aggregate supply. The key assumption of this model is that ALL prices, especially resource prices, are flexible. The primary result of this model is that the economy achieves long-run equilibrium at full-employment real production.

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