Predict how the government spending on infrastructure affect full employment, stability and growth.

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Ashley Kannan eNotes educator| Certified Educator

The theory here is the idea of "stimulating" the economy.  The implication would be that the economy has "stalled" to a certain extent and that to "unstall" it, one has to engage in a series of government spending initiatives which would be able to generate new revenue streams that have dried and inject "life" into the economic state of being.  When government spends money on infrastructure projects, employment increases because individuals are needed to execute and fulfill these responsibilities.  At the same time, with employment increasing, the belief would be that more money would be entering into the economy, as people who have jobs and stable sources of income would be more likely to spend money.  This increase in consumerism would lead to stability, and perhaps initiate more growth in the economy.  The challenge in such an equation would be to ensure that this theoretical perspective is something that works in actuality. Additionally, this would increase the role of government into the economic frame of reference, which would slightly bother classical liberalists who are against government influence in the economic schematic.