Policy Tools - Government Expenditure
Government expenditure in the UK for 2001/2002 is expected to be £394bn. That is:
A lot of money! Seen like this, the importance of government expenditure to the economy is very clear. The government pays for defence, education, social security, health, roads, museums, libraries, the police and courts and.............. All these are vital public services and any changes in the government's spending policies will have a major impact on the economy.
Adjusting the level of government expenditure is a key part of the government's fiscal policy . It is possible to change the level of government expenditure in the model and see the effect both on the macroeconomic targets and on individual families.
To help see the effects of expenditure changes on the economy there are a variety of resources: