Answer to Question #107951 in Macroeconomics for Dineo

Question

What correctly states how government spending is financed

Answer 1

Government spending - They constitute government comsumption activities, investment and transfer payments. Government spending or expenditure require financing and the sources of money include taxes and borrowings (internally or externally). 

Usually the changes in government spending patterns are an important fiscal policy used to control the macroeconomic business cycle.