The government usually has a significant role in economic activity. As economic actors, the government can act as producers and consumers. As a producer, the government provides goods and services primarily to serve the public interest. Examples of health services and community education. In addition, the government also produce goods and services, especially concerning the livelihood of the public, such as electricity, telecommunications, transportation, mining, and fuel distribution. Government economic activity has resulted in no flow of goods and services from the government.
To result in services and public facilities, the government would need goods and services and factors of production. Goods and services derived from the company can be a car, paper, stationery, staff uniforms, and other goods or services used to support services to the community. Factors of production from households can be either civil service personnel, and investment from the public. So, there is the flow of money from the government to pay for goods and services for companies and pay remuneration for domestic factors of production.
The government is also paying for premium subsidies and support services to the community. These payments can be provided to households and enterprises with the aim of improving the welfare of society. For example the fertilizer subsidy to farmers, subsidizing the price of rice, and so forth.
Most sources of funds obtained by the government to finance all the expenses derived from taxes paid by households and firms. In this case there is a flow of funds or money into government coffers from households and firms.