2.2.4 Government expenditure Flashcards
1
Q
What influences gov expenditure
A
The trade cycle and fiscal policy
2
Q
what happens in a boom
A
GDP grows fast
high spending
low unemployment
inflationary pressures (demand pull)
3
Q
what happens in a slump/ slowdown
A
slowing economy
falling GDP
rising unemployment
consumption and investment falling
less inflationary pressures
4
Q
what happens in a recession
A
low or negative growth
two quarters negative
low confidence
low consumption and investment
low or negative inflation
high unemployment
5
Q
what is a depression
A
a long recession
6
Q
what happens in recovery
A
GDP growth
increasing confidence
falling unemployment
7
Q
what is a positive output gap
A
when GDP is above average
8
Q
what is a negative output gap
A
when GDP is below average
9
Q
what is a negative output gap
A
when GDP is below average
