Government Purchases

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DEFINITION of 'Government Purchases'

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.

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