government spending and taxation

Question 1

types of government spending

Answer 1

current, capital, welfare, debt interest payments

Question 2

reasons for gov spending

Answer 2

-influence macroeconomy
-reduce income inequality
-correct market failure

Question 3

types of taxation

Answer 3

-indirect tax (specific (cigarette, alcohol, sugar tax, fuel) and ad valorem (VAT)): on cost of production but passed on.
-direct tax: can’t be transferred

Question 4

reasons for taxation

Answer 4

-raise revenue
-influence macroeconomy
-reduce income inequality
-correct market failure
-protectionsim