2.2.4 Government Expenditure (G)

Question 1

Fiscal policy

Answer 1

A governments policy regarding taxation and public spending.

It can be loose with the emphasis on increased spending and lower tax revenue to boost economic activity with the acceptance of wider fiscal deficit.

Or

It can be tight with emphasis on cutting spending and raising extra tax revenue, with a slower growing economy

Question 2

Fiscal deficit

Answer 2

?????
when government revenues are lower than their spending

Question 3

Government borrowing

Answer 3

The amount of money the government must borrow each year to finance their spending

Question 4

Government debt

Answer 4

The total stock of unpaid debt issued by a government.
A government will normally borrow money by issuing bonds or other securities

Question 5

Government spending

Answer 5

Spending by government on education, healthcare and defence and other public services

Question 6

Trade cycle

Answer 6

refers to fluctuations in economic activities specifically in employment, output and income, prices, profits etc.