Abstract
Government spending on goods and services (as distinct from transfers) acts, like investment, as an injection into the circular flow, whereas taxation, like saving, acts as a leak. Thus budgetary policy can be used to manage the flow of AD (see Chapter 14).
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© 1973 J. Harvey and Janet Johnson
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Harvey, J., Johnson, M. (1973). Government Finance and the Level of Income. In: Introduction to Macro-Economics: A Workbook. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-01871-0_11
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DOI: https://doi.org/10.1007/978-1-349-01871-0_11
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-01873-4
Online ISBN: 978-1-349-01871-0
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