what exactly is meant by government spending.
this is money which is spent by the government. could be on:
public goods: goods and services which cannot be produced by the private sector and are good for the country .e.g. defense, streetlighting...
merit goods: goods which are good for the individual consuming them and good for society as well. e.g. vaccination
governments also spend money to increase production of declining industries to
protect employment, to
give money to those on low income (e.g. farmers), to
subsidise merit goods,
protect domestic industries from foreign competition...
