Question

What is the impact of public expenditure on employment?

• A. It has no significant impact on employment levels.
• B. It primarily leads to job losses in the private sector through increased competition.
• C. It can increase employment by stimulating demand and financing public works projects.
• D. It decreases employment by diverting resources from private investment.

Answer 1

Answer:

C. It can increase employment by stimulating demand and financing public works projects.

• Public expenditure on infrastructure, public services, and other projects creates jobs directly for those working on the projects and indirectly by boosting aggregate demand throughout the economy.