Government Spending
Expenditure by government on goods, services, wages, benefits, infrastructure.
Formula
GDP = C + I + G + (X − M)
Real World
During the 2020 COVID lockdowns, the UK government spent £37bn on the furlough scheme, directly maintaining consumer incomes and preventing a deeper recession.
Exam Focus
Link government spending to the multiplier effect in higher-mark answers; rising G raises aggregate demand beyond the initial injection.
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