Public Expenditure Exam Questions and Answers
3 Types of public expenditure? - Answer-Capital, current and transfer payments
What is capital expenditure? - Answer-Spending on projects/assets that have long term rewards, eg HS2 project
What are transfer payments? - Answer-Gov spends money wi...
Public Expenditure Exam
Questions and Answers
3 Types of public expenditure? - Answer-Capital, current and transfer payments
What is capital expenditure? - Answer-Spending on projects/assets that have long term
rewards, eg HS2 project
What are transfer payments? - Answer-Gov spends money without getting anything in
return, eg welfare payments of benefits or foreign aid
What are 3 important factors influencing public expenditure? - Answer-Age distribution,
incomes and political values
What are governments with an older age distribution likely to commit a higher proportion
of their spending to? - Answer-Pensions and healthcare
Lower age distribution? - Answer-Education
Which part of the aggregate demand gov spending formula is not included in public
expenditure? - Answer-Transfer payments
What is current expenditure? - Answer-Money that the gov spends on recurring costs,
eg wages or raw materials
What are japans' gov most likely to spend money on? - Answer-Healthcare and
pensions, 29% are over 65
What are Botswana's gov most likely to spend money on? - Answer-Education, as 1/3 is
under 15 > 7.8% of gdp goes onto education
What % of its GDP does Japan spend on pensions? - Answer-10% due to having an
ageing population
What does Wagners law state? - Answer-Demand for public sector goods is income
elastic - as incomes increase, so does public expenditure > apart from inferior goods >
decrease in public expenditure
What will happen if a population has high levels of trust in the government? - Answer-If
trust the gov, then trust them to provide high quality public services, meaning people are
willing to pay high taxes in order to fund them - eg Denmark has worlds highest taxes as
gov v well trusted
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