Edexcel A Level Economics A:复习笔记2.2.4 Government Expenditure (G)

Influences on Government Expenditure

  • Government expenditure is influenced by the trade/business cycle and spending linked to achieving policy aims
    • Government expenditure can happen on a local level (e.g., Kent County Council) or a national level (central government)

A Table Explaining the Influence of The Trade Cycle and Policy Aims on Government Expenditure

Influence of The Trade/Business Cycle Influence of Policy Aims

  • Unemployment decreases with a booming economy leading to a lower level of means tested benefit payments - and vice versa
  • Tax revenue increases with a booming economy and can be used to pay back government debt or increase expenditure on public/merit goods - and vice versa

  • Fiscal Policy is set once a year and announced during the presentation of the Government's budget
  • Expenditure is directly related to the Government's objectives and policy aims
  • E.g., A policy aimed at upgrading Britain's Navy requires increased expenditure