Economics AQA A-Level 💵

• What is fiscal policy?

  Government's influence on the economy
• What does government spending include in fiscal policy?

  Infrastructure, education, healthcare, and welfare programs
• What are the key aspects of fiscal policy?

  • Government Spending: Budget allocation for infrastructure, education, healthcare, and welfare.
  • Taxation: Taxes collected from individuals and businesses to fund spending.
• How can fiscal policy impact the economy?

  By managing inflation, reducing unemployment, and stimulating growth
• What is taxation in the context of fiscal policy?

  Taxes collected to fund government spending
• What is one way the government uses fiscal policy?

  Government spending
• What are the effects of fiscal policy on the economy?

  • Helps manage inflation
  • Reduces unemployment
  • Stimulates economic growth
• How do consumers pay indirect taxes?

  Through the prices of goods and services
• What is the effect of higher taxes on wages regarding work incentives?

  They might reduce the incentive to work longer
• How does government spending on infrastructure compare to spending on welfare in terms of economic impact?

  Infrastructure boosts long-term growth, welfare provides safety net
• How do lower taxes affect disposable income?

  They increase disposable income for savings
• Who pays direct taxes?

  Individuals and businesses
• What is the goal of investments in education according to the material?

  To develop skills for the future workforce
• What is the impact of direct taxes?

  Influences earnings and investments
• What are the benefits of welfare spending?

  • Provides safety net
  • Supports vulnerable populations
• What are the common types of government spending?

  Infrastructure, education, healthcare, welfare, defense
• What tax affects consumer spending on goods and services?

  Value-added tax (VAT)
• How do corporation tax rates affect businesses?

  They influence businesses' ability to invest and expand
• How does government spending on education benefit Great Britain?

  • Develops a skilled workforce
• How does the government influence the economy through fiscal policy?

  By adjusting spending and taxation levels
• What is the impact of indirect taxes?

  Affects consumption habits
• What are the benefits of education spending?

  • Enhances skills
  • Increases employability
• How does government spending on infrastructure benefit Great Britain?

  • Improves connectivity
  • Enhances the economy
• What is a direct tax?

  Levied on income or assets
• What are the benefits of healthcare spending?

  • Improves health outcomes
  • Boosts workforce productivity
• What are the benefits of infrastructure spending?

  • Improves connectivity
  • Supports economic activity
• What are the main impacts of taxation on the economy?

  • Encourages saving and investment
  • Discourages work due to higher taxes
  • Affects business profitability through corporation tax
  • Shapes consumer spending via VAT
  • Redistributes wealth through progressive taxation
• What are the key differences between direct and indirect taxes?

  • Direct Tax:
  • Levied on income or assets
  • Examples: Income Tax, Corporation Tax, Inheritance Tax
  • Paid by individuals and businesses
  • Influences earnings and investments

  
  

  • Indirect Tax:
  • Applied to goods and services
  • Examples: VAT, Customs Duty
  • Paid by consumers through prices
  • Affects consumption habits
• How does a progressive tax system help with income inequality?

  It taxes higher earners more to redistribute wealth
• What are the types of government spending and their impacts?

  • Infrastructure: Boosts long-term growth (e.g., roads, bridges)
  • Education: Improves human capital (e.g., schools, universities)
  • Healthcare: Enhances productivity and well-being (e.g., hospitals, clinics)
  • Welfare: Provides social safety net (e.g., unemployment benefits)
• What does a budget deficit indicate about government spending?

  The government spends more than it collects
• How does Great Britain exemplify transparency in fiscal management?

  HM Treasury publishes detailed budget reports online
• How do direct taxes differ from indirect taxes in terms of payment?

  Direct taxes are paid directly, indirect taxes are included in prices
• What does efficiency in fiscal management refer to?

  Spending should be optimized for best outcomes
• What is one significant impact of taxation on the economy?

  It encourages saving and investment
• Who pays indirect taxes?

  Consumers through prices
• What is an indirect tax?

  Applied to goods and services
• What is one economic impact of a budget surplus?

  Reduces debt but can slow economic growth
• What is one economic impact of a budget deficit?

  Can stimulate economic growth but may lead to debt
• What is the expected impact of increased spending on HS2?

  It will boost the economy by creating jobs