Government Finance and the Level of Income

  • J. Harvey
  • M. Johnson


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).


Government Expenditure National Income Government Spending Capital Gain Unemployment Benefit 
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Copyright information

© J. Harvey and Janet Johnson 1973

Authors and Affiliations

  • J. Harvey
    • 1
  • M. Johnson
    • 2
  1. 1.University of ReadingUK
  2. 2.Hatfield PolytechnicUK

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