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Question 1

what do free market economists argue about government spending

Answer 1

it is wasteful and causes inefficiency

Question 2

What are economies of scale

Question 3

Four factors that government spending leads to productivity and growth

Answer 3

Education, health care, human capital and infrastructure

Question 4

Why can government spending improve living standards

Answer 4

It removes poverty and helps people improve their lifestyles

Question 5

What is the debate over how much the government can contribute to living standards

Answer 5

If countries don’t provide help over living standards, then it will negatively affect their people and the output for the country will be less

Question 6

Explain the term ‘crowding out’

Answer 6

The government borrowing from individuals

Question 7

What do free market economists argue about investment?

Answer 7

That investment would be more efficient if done by the private sector

Question 8

What the correlation between government spending and taxation?

Answer 8

If government spending is high then taxation is high

Question 9

What the correlation between government spending and equality?

Answer 9

More spending leads to more equality

Question 11

Explain the difference between progressive taxes, proportional taxes and regressive taxes

Question 12

Explain the effect of changes in direct and indirect tax rates on income distribution

Answer 12

Direct tax - income tax
Indirect tax - VAT

Question 13

Explain the effect of changes in direct and indirect tax rates on the price level

Question 14

Explain the effect of changes in direct and indirect tax rates on the trade balance

Question 15

Explain the effect of changes in direct and indirect tax rates on FDI flows

Answer 17

higher taxes mean more