Share This Article:

Economic Definition of government purchases. Defined.

Offline Version: PDF

Term government purchases Definition: Expenditures on final goods and services (that is, gross domestic product) undertaken by the government sector. Government purchases are used to operate the government (administrative salaries, etc.) and to provide public goods (national defense, highways, etc.). Government purchases do not include other government spending for transfer payments. These are expenditures on final goods by all three levels of government: federal, state, and local governments. Government purchases are financed by a mix of taxes and borrowing.


« government policies | government purchases determinants »


Alphabetical Reference to Over 2,000 Economic Terms