fake Flashcards
what do free market economists argue about government spending
it is wasteful and causes inefficiency
What are economies of scale
Four factors that government spending leads to productivity and growth
Education, health care, human capital and infrastructure
Why can government spending improve living standards
It removes poverty and helps people improve their lifestyles
What is the debate over how much the government can contribute to living standards
If countries don’t provide help over living standards, then it will negatively affect their people and the output for the country will be less
Explain the term ‘crowding out’
The government borrowing from individuals
What do free market economists argue about investment?
That investment would be more efficient if done by the private sector
What the correlation between government spending and taxation?
If government spending is high then taxation is high
What the correlation between government spending and equality?
More spending leads to more equality
Explain the difference between progressive taxes, proportional taxes and regressive taxes
Explain the effect of changes in direct and indirect tax rates on income distribution
Direct tax - income tax
Indirect tax - VAT
Explain the effect of changes in direct and indirect tax rates on the price level
Explain the effect of changes in direct and indirect tax rates on the trade balance
Explain the effect of changes in direct and indirect tax rates on FDI flows
higher taxes mean more
