When government spending exceeds revenue, it creates a fiscal deficit. High deficits, if unmanaged, can lead to excessive borrowing, debt burden, and long-term economic instability.... Read More
Author: Finxl.1
Government expenditure on public enterprises and subsidies (e.g., food, fuel, agriculture) aims to ensure accessibility and support key industries. However, inefficient subsidies can burden the budget and distort markets.... Read More
Ensuring that public money is spent wisely requires transparency, audits, and accountability mechanisms. Mismanagement or corruption in government expenditure weakens trust and reduces effectiveness.... Read More
Excessive government spending, especially without corresponding revenue, can lead to inflation. Prudent spending is essential to maintain price stability and avoid overheating the economy.... Read More
Spending on national defense ensures security and sovereignty. While not directly productive economically, it is crucial for maintaining a stable environment necessary for development.... Read More
Productive public spending boosts demand, encourages private investment, creates jobs, and accelerates GDP growth. It has a multiplier effect on the economy by stimulating consumption and production.... Read More
Productive public spending boosts demand, encourages private investment, creates jobs, and accelerates GDP growth. It has a multiplier effect on the economy by stimulating consumption and production.... Read More
Planned expenditure is outlined in government development plans and budgets, whereas non-planned expenditure includes obligations like interest payments and defense, which continue regardless of the development agenda.... Read More
Capital expenditure involves long-term investments like infrastructure and asset creation, while revenue expenditure includes recurring costs such as salaries, subsidies, and interest payments. Both are necessary but serve different purposes.... Read More
Government spending is essential for nation-building, providing public goods, and reducing inequality. It helps drive economic activity, particularly in times of low private sector demand.... Read More