Public expenditure Flashcards
What is current expenditure?
Day to day government spending such as wages
What is capital expenditure?
Spending on investment goods such as roads, infrastructure, schools and hospitals that will be consumer over a year
What are transfer payments?
Government spending for which there is no output (benefits)
Why did the financial crisis increase government expenditure?
Increased bail out money
Increased spending on benefits
Why has UK government expenditure fallen?
Austerity measures to reduce the government debt
How does government expenditure increase productivity?
Infrastructure, such as roads, improve quality of factors of production, increased efficiency
Better education, better quality of Labour, more skill, more efficiency, more productivity
How does government spending affect living standards?
Increased government benefits, welfare benefits, higher incomes, less relative poverty
