As an example, consider the government increasing its expenditure on roads by $1 million, without a corresponding increase in taxation. This sum would go to the road builders, who would hire more workers and distribute the money as wages and profits. The households receiving these incomes will save part of the money and spend the rest on consumer goods. These expenditures, in turn, will generate more jobs, wages, profits, and so on with the income and spending circulating the economy.
As an example, consider the go.vernment increasing its expenditure on roads by $1 million without a corresponding increase in taxation. This sum would !go to the road builders, who would hire more workers and distribute the money as wages and profits. The households receiving thes?e incomes will save part of the money and spend the rest on consumer goods. These expenditures, in turn, will generate more jobs, wages, profits, and so on with the income and spending circulating the economy.