233,871 views
45 votes
45 votes
Where would you increase or decrease the amount of government spending?

User UditS
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2.6k points

2 Answers

19 votes
19 votes
When the government decreases taxes, disposable income increases. That translates to higher demand (spending) and increased production (GDP). ... If the government were to keep taxes the same, but decrease its spending, it would have the same effect as a tax increase, but through a slightly different channel.
User Prayag Choraria
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2.5k points
14 votes
14 votes

I would increase government spending in natural disaster relief.

User Maks
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2.8k points