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4.5.1 Public expenditure

Easy
123
Question 2

A government announces a £500 million£500\text{ million}£500 million healthcare intervention package, which is allocated as follows:

  • £200 million£200\text{ million}£200 million for the construction of permanent modular diagnostic clinics.
  • £150 million£150\text{ million}£150 million to pay the wages and salaries of the medical staff running the clinics.
  • £150 million£150\text{ million}£150 million for direct welfare grants to low-income households to assist with living costs.

Which of the following correctly classifies these three items of public expenditure?

A

Modular clinics: Capital expenditure; Staff wages: Current expenditure; Welfare grants: Transfer payments

B

Modular clinics: Capital expenditure; Staff wages: Transfer payments; Welfare grants: Current expenditure

C

Modular clinics: Current expenditure; Staff wages: Capital expenditure; Welfare grants: Transfer payments

D

Modular clinics: Current expenditure; Staff wages: Current expenditure; Welfare grants: Transfer payments

Markscheme

4.5.1 Public expenditure Questions

  1. A Level
  2. /Economics
  3. /4.5.1 Public expenditure

3 exam-style questions on Edexcel A A Level Economics 4.5.1 Public expenditure. Each one has a worked solution and a mark scheme showing where the marks go.

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