Public expenditure

Question 1

What are the three types of public expenditure?

Answer 1

Current expenditure
Capital expenditure
Transfer payment

Question 2

What is current expenditure?

Answer 2

These include the daily payments required to to run the government and public sector

Question 3

What is capital expenditure?

Answer 3

These are investments in infrastructure and capital equipment.

Question 4

What is transfer and payments

Answer 4

Payments made by the government for which no goods/services are exchanged

Question 5

What are the reasons for changing size and composition of public expenditure?

Answer 5

Changing incomes
Changing age distribution
Changing expectations
The global financial crisis of 2008

Question 6

What are the benefits of Public expenditure?

Answer 6

Improvement to the supply side policy
Improves equality
Raises standards of living
Reduces poverty and inequality
Increases economic growth

Question 7

What are the drawbacks to public expenditure?

Answer 7

Could create corruption
Could increase budget deficit
May increase tax levels
Could create inequality