How might government spending on infrastructure be seen as both demand side policy and supply side policy?

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2026-04-19 09:50

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Government spending on infrastructure can be viewed as a demand-side policy because it directly injects money into the economy, creating jobs and increasing demand for goods and services in the short term. Simultaneously, it acts as a supply-side policy by improving the overall productivity and efficiency of the economy through enhanced transportation, utilities, and communication systems, thereby facilitating long-term economic growth. This dual impact helps stimulate economic activity while also laying the groundwork for future expansion.

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