According to Keynesian economics, more government spending enhances aggregate demand and consumption, which leads to increased production and a quicker recovery from recessions.
Government expenditure growth stimulates the economy's overall demand and contributes to some real GDP growth.More people find work and earn money as a result of that rise. A greater increase in consumer spending as a result of higher incomes increases aggregate demand and supports continued real GDP growth.
The theory's central thesis is that government spending raises household income, which in turn stimulates consumer spending. As a result of increasing corporate revenues, output, capital expenditures, and employment, the economy is then further stimulated.
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