Structure of government expenditures by economic transaction

Another way of classifying public spending is by economic transactions, for example employee compensation, financing subsidies, cash transfers such as social or unemployment benefits, and intermediate consumption (i.e. procurement goods services from the private sector that are used in government production). This classification distinct expenditures function, which groups thematic categories (e.g. health, education, defence, etc.), it distinguishes broader government’s production function. By considering both types classifications, possible to gain a more comprehensive understanding patterns their impact on economy.