Government spending

Question 1

what was the top 3 govt spending in 24/25


Answer 1

-social protection,£371 bn
-health,£251bn
-education,£131bn

Question 2

what were the top 3 sources of govt revenue In 24/25


Answer 2

-income tax,£303bn
-VAT,203bn
-NICs,£168bn

Question 3

what is meant by a fiscal deficit 


Answer 3

when govt expenditure is greater than govt revenues, the govt have to take out loans to resolve this

Question 4

what is meant by current and capital govt spending 


Answer 4

-current is ongoing expenditure on providing public services, salaries to NHS staff, road maintenance
-capital is a one time, lumpsum investment on public infrastructure,e.g new motorways and NHS equipment

Question 5

how can the govt stimulate the economy(fiscal stimulus)


Answer 5

they are likely to decrease tax to increase consumption

Question 6

what does an expansionary fiscal policy involve

Answer 6

increase govt spending or decrease taxes to stimulate economic activity, especially through times of recession

Question 7

what does a contractionary fiscal policy involve 


Answer 7

reducing govt spending or increasing taxes to shrink an overheating economy to control inflation

Question 8

why does the government aim for a balanced government budget

Answer 8

to ensure fiscal stability, reduce debt accumulation, and provide flexibility during economic downturns.