What are government purchases?

Government purchases are expenditures on goods and services by federal, state, and local governments. The combined total of this spending, excluding transfer payments and interest on the debt, is a key factor in determining a nation's gross domestic product (GDP).

What percentage of GDP is consumption expenditure?

Consumption expenditure, that is, spending by households and individuals, is about two-thirds of GDP, but it moves relatively little over time. Investment expenditure and government spending on goods and services are each about the same order of magnitude, 15-20% of GDP.

How much does government spend on goods and services?

Investment expenditure and government spending on goods and services are each about the same order of magnitude, 15-20% of GDP. Investment is the most variable category of expenditure, increasing and decreasing more than the other categories. Figure 2 (b) shows the levels of exports and imports as a percentage of GDP over time.