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Edexcel A-Level Economics A2 4.3.5 1c Significance of Differing Levels of Public Expenditure As a Proportion of Gdp on Questions

Practise assessing public expenditure through AD and multiplier effects, productive capacity, private investment and crowding-out trade-offs.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
A2

Exam points

  • analyse spending changes through AD, the multiplier, real output, employment and inflation
  • link infrastructure, education or healthcare spending to productivity and a shift in LRAS
  • explain financial and resource crowding out when higher spending requires government borrowing
  • evaluate effects using ratio magnitude, spending composition, spare capacity and multiplier size

Edexcel A-Level Economics A2 4.3.5 1c Significance of Differing Levels of Public Expenditure As a Proportion of Gdp on Questions question 1

[Maximum number: 1]

Between 2014 and 2019 France's public expenditure as a proportion of GDP fell from 57.2% to 55.6\%.

Which one of the following is the likely impact of a decrease in public expenditure?

A

A decrease in unemployment

B

A decrease in crowding out

C

An increase in injections

D

An increase in inflationary pressures

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