ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The exchange rate
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Perceived degree of market of market failure
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Public sector debt
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The economic situation
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Detailed explanation-1: -The studies have identified income per capita, dependency ratio, population, urbanisation, trade openness, foreign aid, and inflation, among others as the determinants of government expenditure.
Detailed explanation-2: -In 2022-23, we expect central government departments to spend £415.5 billion on the day-to-day (’current’) running costs of public services, grants and administration. This is 35 per cent of public spending. The biggest items are health (£168.2 billion), education (£77.1 billion) and defence (£32.1 billion).
Detailed explanation-3: -While an increase in government purchases causes real exchange rates to appreciate and increases consumption significantly in developing countries, it causes real exchange rates to depreciate and decreases consumption in advanced countries.
Detailed explanation-4: -Government spending as percent of GDP, 2021-Country rankings: The average for 2021 based on 154 countries was 16.83 percent. The highest value was in the Seychelles: 36.52 percent and the lowest value was in Lebanon: 2.36 percent. The indicator is available from 1960 to 2021.