government spending and AD

Question 1

what is government spending and what does it influence

Answer 1

-spending by the government to influence activity within the economy

Question 2

different types of government spending

Answer 2

-current spending: spending on the maintenance of the public sector and public sector wages
-capital spending: spending on infrastructure projects
-welfare spending: spending on welfare benefits and pensions
-debt interest payments

Question 3

surplus vs deficit (gov)

Answer 3

surplus: when government spending is less than tax revenue in a fiscal year
deficit: when government spending is greater than tax revenue in a fiscal year

Question 4

what is national debt

Answer 4

-the total stock of debt over time
-the accumulation of budget deficits