Economics N5 prelim revision guaranteed A
What is public sector expendature? ️️Spending by centeral goverment, local government and
public corporations
What is capital expendature ️️Spending on long term projects, this helps to create productive
capacity (e.g building hospitals )
...
What is public sector expendature? ✔️✔️Spending by centeral goverment, local government and
public corporations
What is capital expendature ✔️✔️Spending on long term projects, this helps to create productive
capacity (e.g building hospitals )
What is current expendature ✔️✔️This covers day to day running costs of government (e.g the pay of
public sector workers)
What is a transfer payment ✔️✔️A payment to an individual or firm for which there is no economic
benefit given in return ( e.g pensions)
Government "golden rules "about public sector spending ✔️✔️. Borrowing should not be used to
finance current spending
. Accounting for capital and current spending should be separate so that it's easy to see which is which
. Public sector debt , as a proportion of GDP should be kept low
Reasons for public sector expendature ✔️✔️.provide public goods
.provide merit goods
.Provide security
.provide wellfair
.Redistribute income
Areas of government expendature ✔️✔️Health, education , nhs,security,transport ect....
Trends in gov expenditure ✔️✔️Increase in expendature on health and education but social security
spending has decreased because the ageing population has led to more spending on retirement
pensions
, What are the 3 main areas of gov expendature ✔️✔️Social protection
Health care
Education
What are areas of gov income ✔️✔️.interestand rents
.surpluses of nationalised industries
.privatisation of national industries
. The national lottery
What are direct taxes ? ✔️✔️Those taxes which are taken directly from individuals and firms by the
government .they are sent directly to the entity who imposed it .
Examples of direct tax ✔️✔️.national insurance
.corporation tax
.corporation tax
.council tax
.ect ...
What is indirect taxation ✔️✔️Thèse are taxes on spending and production therefore the amount paid
depends on the level of consumption and production.the tax is not collected by government source a
third party will intermediary will collect it and pass it on to the government .
Examples of indirect taxation ✔️✔️.customes tax
.excise duties
.petrol tax
.vehicle tax
Ect...
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