---
title: "How does government spending impact the economy?"  
description: "How does government spending impact the economy?"  
author: "Baishakhi Ghosh"  
published: 2024-08-23  
updated: 2024-08-24  
canonical: https://answers.mindstick.com/qa/113389/how-does-government-spending-impact-the-economy  
category: "economy"  
tags: ["economy"]  
reading_time: 1 minute  

---

# How does government spending impact the economy?



## Answers

### Answer by Lakshya Sharma

[Government spending](https://answers.mindstick.com/qa/34968/how-much-has-federal-government-spending-grown) is [considered as](https://yourviews.mindstick.com/story/4717/9-reasons-why-moringa-leaves-is-considered-as-superfood) the main determinant of the economy. A government can provide stimuli to economy and create jobs by spending on [infrastructure](https://yourviews.mindstick.com/view/85354/impact-of-cyberattacks-on-indian-infrastructure), health, [education](https://www.mindstick.com/articles/85754/investing-in-higher-education) and defense.

During [economic recession](https://answers.mindstick.com/qa/113396/what-is-economic-recession), increased public spending in the form of stimulus package boosts demand, motivating businesses to employ people and produce more [goods and services](https://answers.mindstick.com/qa/101686/can-you-explain-the-goods-and-services-tax-gst-in-india) thus reviving the economy.


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Original Source: https://answers.mindstick.com/qa/113389/how-does-government-spending-impact-the-economy

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