Government spending will increase consumption and raise actual income, which in turn will drive consumption. Taxes lower actual income and in turn will lower consumption. If the government wants to stimulate the economy, it can do this in one of two ways, lower taxes or increase spending. Governments have the option to spend an economy out of a depression, however this comes with a cost. In economics everything is about trade offs.
Investments also drive income and in turn consumption.
There are several ways in which an economy can be stimulated or slowed down. Take the simple example of interest rates. Investments consume resources in the form of interest. As interest rates rise, the cost of investments will increase and subsequently investments will be reduced because of the scarcity and choice reasoning explained earlier. This is further explored in the Quantity Theory of Money .