4.4.2 Government Expenditure

• Current expenditure includes spending on long-term investments.

  False
• What tool can government expenditure be used for?

  Fiscal policy
• Match the source of government revenue with its description:

  Taxes ↔️ Compulsory payments levied by the government

  Borrowing ↔️ Government issues bonds and debt

  Other Revenue ↔️ Fees, fines, royalties, and profits
• Government expenditure is divided into current expenditure for day-to-day operations and capital expenditure for long-term investments
• Capital expenditure aims to achieve short-term economic stability.

  False
• The impact of government expenditure depends on whether fiscal policy is expansionary or contractionary
• Decreases in government expenditure typically stimulate economic growth.

  False
• What is government expenditure defined as?

  Spending on goods, services, investments
• Capital expenditure involves spending on long-term investments such as infrastructure
• Capital expenditure includes the payment of public sector wages.

  False
• Why is understanding government revenue sources important for fiscal policy?

  To fund additional spending
• What is the impact of current expenditure on the economy?

  Short-term economic stability
• What is an example of a compulsory payment levied by the government?

  Income tax
• Match the fiscal policy with its economic impact:

  Expansionary ↔️ Stimulates economic growth, may increase inflation

  Contractionary ↔️ Slows growth, helps control inflation