Term 1 - Topic 2 Unit 2

Question 1

What is ECONOMICAL SPENDING?

Answer 1

Distinguish between CONSUMPTION and INVESTMENT spending

(distinguish between ‘c’ and ‘i’ spending)

Question 2

ECONOMICAL spending can be classified according to SIX types of services

(remember: G
D
C
E
A
U)

Answer 2

• General services
• Defence public
• Community services
• Economic services
• Agriculture
• Unallocated services

Question 3

What is FUNCTIONAL SPENDING?

Answer 3

Measures the PURPOSE for which transactions are undertaken.

In other words what is the purpose of the spending.

EXAMPLE: How much is spent by government on EDUCATION in the country?

Question 4

A country spends the most on ……………………………… and the LEAST on…………..

Answer 4

MOST - Education
LEAST - Environmental protection

Question 5

Why is it important for a GOVERNMENT to spend money?

Answer 5

GOVERNMENT provides GOODS and SERVICES :
= TO satisfy the needs of people and communities
= at COST .. or FREE
= CREATE EMPLOYMENT (building dams, roads)