Economics Budget

• What does expenditure refer to in a government budget?

  Spending on public services like education
• What is a surplus in the context of a government budget?

  The difference when revenue exceeds expenditure
• What is the primary aim of tax cuts?

  To stimulate the economy
• What is a government budget?

  A plan outlining revenue and expenditure
• What constitutes revenue in a government budget?

  Taxes, fees, and other forms of income
• If a country collects £150 billion in taxes and spends £120 billion, what is its budget surplus?

  £30 billion
• How does a budget surplus affect national debt?

  It reduces national debt
• What is budget expansion?

  Increases government spending or reduces taxation
• How do tax cuts stimulate the economy?

  By increasing disposable income and encouraging spending
• What is the primary effect of budget expansion on the economy?

  It stimulates the economy
• What was a consequence of the 2013 UK tax cuts?

  Rising inequality due to benefits cuts
• What are the intended and unintended effects of tax cuts on individuals?

  • Intended Effects:
  • Higher disposable income
  • Unintended Effects:
  • Increased inequality
• Why might a government implement budget contraction?

  To control inflation or reduce debt
• What does a budget surplus indicate about a government's financial management?


  It shows responsible financial management
• Why is a government budget important?

  It allocates resources to achieve economic goals
• How did benefits cuts affect the impact of the 2013 UK tax cuts?

  They outweighed tax reductions for low-income earners
• What is budget contraction?

  Reduces government spending or raises taxation
• What is a budget deficit?

  When expenditure exceeds revenue
• How can a budget deficit affect the economy in the short term?

  It may stimulate the economy
• What is a deficit in the context of a government budget?

  The difference when expenditure exceeds revenue
• What are the impacts of budget expansion and contraction on government spending and revenue?

  • Expansion:
  • Higher spending
  • Potentially lower revenue from reduced taxes
  • Contraction:
  • Lower spending
  • Potentially higher revenue from increased taxes
• What does a budget deficit indicate about government spending?

  It indicates overspending beyond revenue
• If a country spends £180 billion and collects £150 billion, what is its budget deficit?

  £30 billion
• What are the key aspects of a budget surplus?

  • Revenue > Expenditure
  • Reduces national debt
  • Shows responsible financial management
• How do deficits and surpluses affect government budgeting?

  They indicate financial health and resource allocation
• What are the key components of a government budget?

  • Revenue: Taxes, fees, and income
  • Expenditure: Spending on public services
  • Deficit or surplus: Difference between revenue and expenditure
• What was the purpose of the 2013 UK tax cuts?

  To boost consumption
• What can be a result of budget contraction?

  A smaller budget deficit or surplus
• How does a budget deficit compare to a budget surplus?

  | Budget | Revenue vs. Expenditure | National Debt |

  |---|---|---|

  | Surplus | Revenue > Expenditure | Decreases |

  | Deficit | Expenditure > Revenue | Increases |
• What are the key aspects of a budget deficit?

  • Expenditure > Revenue
  • Increases national debt
  • May stimulate the economy in the short term
• What is a common goal of budget contraction?

  To control inflation
• What does it mean if a government's revenue exceeds its expenditure?

  It indicates a budget surplus
• What are unintended consequences of tax cuts?

  Negative effects that were not anticipated
• What are the intended and unintended effects of tax cuts on the economy?

  • Intended Effects:
  • Economic growth
  • Unintended Effects:
  • Higher national debt
• What is a likely result of budget expansion?

  A larger budget deficit
• What are the intended and unintended effects of tax cuts on businesses?

  • Intended Effects:
  • More investment
  • Unintended Effects:
  • Inflation if spending increases rapidly
• What is the relationship between budget deficit and national debt?


  A budget deficit increases national debt
• What is a budget surplus?

  When revenue exceeds expenditure