Question

Can an increase in federal spending lead to overall growth?

Answer 1

Of course it can

Answer 2

But How?

Answer 3

you might get a better answer if you ask from here: http://openstudy.com/study#/groups/Economics%20-%20Financial%20Markets

Answer 4

It really depends on where the money is spent, and not all federal spending is necessarily intended to promote economic growth. Stimulus packages, investment in industry, etc. will and are intended to lead to growth (creates jobs, exports, leaves consumers with more extra money to spend, thus helping small business, etc). Medicare spending and financing the deployment of troops overseas are generally not things that lead to, nor are intended to create economic growth. They serve other purposes.

Answer 5

Anythings possible. Spending money on infrastructre and industry increase growth in the past. As long as it is done the right way.