- Government expenditure is influenced by the trade/business cycle and spending linked to achieving policy aims
- Government expenditure can happen on a local level (e.g., Kent County Council) or a national level (central government)
A Table Explaining the Influence of The Trade Cycle and Policy Aims on Government Expenditure
| Influence of The Trade/Business Cycle |
Influence of Policy Aims |
- Unemployment decreases with a booming economy leading to a lower level of means tested benefit payments - and vice versa
- Tax revenue increases with a booming economy and can be used to pay back government debt or increase expenditure on public/merit goods - and vice versa
|
- Fiscal Policy is set once a year and announced during the presentation of the Government's budget
- Expenditure is directly related to the Government's objectives and policy aims
- E.g., A policy aimed at upgrading Britain's Navy requires increased expenditure
|
