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4.5 Role of the state in the macroeconomy

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Question 20

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?

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

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

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

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

4.5 Role of the state in the macroeconomy Questions

  1. A Level
  2. /Economics
  3. /4.5 Role of the state in the macroeconomy