Pearson Edexcel A Level · Economics A (9EC0)

4.5.1-4.5.2 Public expenditure and taxation: Practice Questions

5 multiple-choice questions marked as you go, and 3 written questions with worked solutions. All on 4.5.1-4.5.2 Public expenditure and taxation.

8 questions20 marksFree, no account

Question 1

1 mark

A government increases spending on the construction of new high-speed rail networks and 5G infrastructure. According to the classification of public expenditure, this would be categorized as:

Question 2

1 mark

In a global context, which factor is most likely to cause a significant increase in the size of public expenditure as a proportion of GDP in developed economies?

Question 3

1 mark

Which of the following is most likely to cause a 'crowding out' effect as a result of increased public expenditure?

Question 4

1 mark

How does a high level of public expenditure on education and training most likely influence an economy's international competitiveness in the long run?

Question 5

1 mark

Which of the following statements best distinguishes between the cyclical deficit and the structural deficit?

Question 6

4 marks

Distinguish between capital expenditure and transfer payments as components of public expenditure, providing one example for each.

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Question 7

5 marks

Explain how high levels of public expenditure can lead to the crowding out of the private sector and discuss its potential impact on an economy's long-term productivity and growth.

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Question 8

6 marks

Evaluate the reasons why the size and composition of public expenditure as a proportion of GDP might change significantly for a developing economy transitioning into an emerging market.

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