Answer to Question #213944 in Economics for Precilla

Question

Critically discuss any three Macroeconomic and at least two Microeconomic reasons for growth 

in government expenditure

Answer 1

Macroeconomic reasons are:

• Price rise – higher price level compels the government to spend an increased amount on purchase of goods and services.
• Increase in public revenue – with the rise in public revenue government is bound to increase the public expenditure.
• Recession, which may be fixed with the increase in government spending.

Microeconomic reasons are:

• The need to support agricultural industry damaged with draft.
• Government supported industry faces losses, so the government spending increases to cover tge loss.