Fiscal Policy Flashcards
1
Q
What is government borrowing?
A
It is the amount the government must borrow each year to finance their spending
2
Q
What does the government spend money on?
A
Infrastructure
Schools
Hospitals
Welfare
Transport
Civil service
3
Q
Where does the government get the money from?
A
Tax
4
Q
What happened in 2007-08
A
The Financial Crash
5
Q
Why does the government get into debt
A
If your tax revenues are less than the amount you have to pay back then you have to borrow more money
6
Q
Do they government have to pay interest on top of the money they owe?
A
Yes
