What are 'Government Purchases'

Government purchases are expenditures made in the private sector by all levels of government, such as when a government entity contracts a construction company to build office space or pave highways.

BREAKING DOWN 'Government Purchases'

A component of Keynesian expenditures, government purchases can be used as a tool for a government to influence the business cycle and provide economic stimulation when it is deemed necessary.

RELATED TERMS
  1. Expenditure Method

    A method for calculating GDP that totals consumption, investment, ...
  2. Fiscal Policy

    Government spending policies that influence macroeconomic conditions. ...
  3. Business To Government - B To G

    Professional affairs conducted between companies and regional, ...
  4. Capital Expenditure (CAPEX)

    Capital expenditure, or CapEx, are funds used by a company to ...
  5. Limited Government

    A political system in which legalized force is restricted through ...
  6. Government Bond

    A debt security issued by a government to support government ...
Related Articles
  1. Small Business

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  2. Investing

    What are Government Securities?

    Government securities are debt instruments that governments issue to raise capital.
  3. Insights

    Explaining Limited Government

    Limited government is a political viewpoint that favors few, if any, government controls on individuals and the economy.
  4. Investing

    Explaining Government Bonds

    A government bond is a debt security a government issues.
  5. Insights

    Crowding Out Effect

    Crowding out effect is an economic term referring to government spending driving down private sector spending, and can have several more specific meanings.
  6. Investing

    How Is the Bank of Japan Monetizing Government Debt?

    With its massive QE program and more recent adoption of negative interest rates, it looks like the BOJ is monetizing the Japanese government's debt.
  7. Investing

    Explaining Privatization

    For a publicly traded company, privatization is the act of transitioning the company to ownership by private individuals.
  8. Small Business

    Government Subsidies For Business

    Many industries rely on government assistance in both good times and bad. What are the benefits of these programs, and how do they impact the consumer?
  9. Insights

    Austerity: When The Government Tightens Its Belt

    When a government tightens its belt in tough economic times the entire nation feels the squeeze.
  10. Personal Finance

    The Highest Paying Government Jobs

    Learn how professionals can work for the government and still make high salaries; identify the specific professions that pay the most in government work.
RELATED FAQS
  1. How should a company budget for capital expenditures?

    Learn the difference between capital expenditures and operational expenses, and discover the importance of budgeting for ... Read Answer >>
  2. Are Social Security payments included in the US GDP calculation?

    Understand how gross domestic product is calculated and whether or not transfer payments such as Social Security are included ... Read Answer >>
  3. What is the difference between a capital expenditure and a revenue expenditure?

    Understand the difference between a company's capital expenditures and revenue expenditures, and how each expense appears ... Read Answer >>
  4. What are the different groups involved in corporate governance?

    Learn about the challenges inherent to defining and executing corporate governance, and understand why different groups work ... Read Answer >>
  5. What is the effect of a fiscal deficit on the economy?

    Take a deeper look into the real impacts of government budget deficits on the economy, and why government financing reduces ... Read Answer >>
  6. How do you calculate GDP with the expenditures approach?

    Learn how to calculate gross domestic product, or GDP, using the expenditures approach, also known as the measurement of ... Read Answer >>
Hot Definitions
  1. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  2. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  3. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  4. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  5. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  6. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
Trading Center