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Goverment spending. How and why the Government spends and how this might affect Tescos.

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  • Essay length: 1694 words
  • Submitted: 17/06/2010
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GCSE Economy & Economics

The first 200 words of this essay...

Nanaesi Wright

Unit 39

The Government is the biggest spender in the economy. Money is spent in the Public, Private and Voluntary sector.

The government spends money on different things needed for the economy to ensure that standards of living in the country remain high and avoids the country from going down during recession. In a return the government receive money from taxes such as VAT, NI Tax, Income tax etc which is from the general public.

This chart shows the different things that the government spend on.

When the government spends money in the public sector it indirectly spends money in the private sector as workers from the private sector will be hired and paid for the work done. This is done as they need specialist skills that are essential for the work for example building a school. Contractors will be needed for any construction work that will be needed.

Deficit Funding - This is when the government expenditure is higher than what they receive.

Government spending is so important in an economy that they are sometimes forced to borrow money when they don't have enough due to overspending. To improve standards

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