Changes in government spending and taxes can help bring the economy to full employment. When the government increases its spending or decreases taxes, its budget balance declines. These are referred to as transfer payments. They channelized these economics in four categories i.
If this is the case, then these imports do not represent demand for goods produced in this country. According to the Economic Report of the President, over the past 46 years, total government spending on goods and services, as well as federal spending by itself, has fallen as a percentage of GDP while state and local spending has increased as a percentage of GDP.
He also argued that the government could alleviate the unemployment by increasing demand through either increases in government spending or decreases in taxes.
At each round, income decreases because of decreases in both consumption expenditures and government expenditures. They studied Sweden and Ireland economies.