Practise linking tax and spending changes to employment, inflation, GDP and deflation using data, policy choices and evaluation.
Missions to outer space face the same basic economic problem as that experienced on Earth. The African Space Agency was created to improve science and technology on the African continent. This agency also aims to coordinate trade between African countries to help technological development. This may improve how markets work. In 2021, total government spending on this agency was more than $ 500 million.
Discuss whether or not an increase in government spending will benefit an economy.
Discuss whether or not an increase in government spending will benefit an economy.
In assessing each answer, use the table opposite.
Why it might:
- increase total demand
- some forms of government spending e.g. education / healthcare may increase productivity
- reduce unemployment
- increase economic growth
- reduce inequality
- increase access to merit goods
- provide public goods
Why it might not:
- increased inflation
- increase a current account deficit if spent on e.g. imported capital goods
- increased taxation to pay for increased spending
- increase government debt
- government spending may be inefficient - the private sector may be more efficient
8
Level
3
5(d)
8
Level
1
Description
Marks
There is a simple attempt at using economic definitions and terminology.
Some reference may be made to economic theory, with occasional understanding.
1-2
0
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creditable content.