The black market refers to illegally buying and selling goods and services without paying the taxes due, such as VAT, income tax or corporation tax.
Government current expenditure is money that the government spends regularly.
Government capital expenditure refers to once-off or occasional government payments.
Debt servicing refers to the repayment of interest and principal on the government’s debts.
A balanced budget is where planned income and planned expenditure are the same.
A budget deficit is where planned expenditure is greater than planned income.
National debt refers to the total amount of money which a country’s government owes in borrowings.
Monetary policy aims to control the supply of money in the economy through the printing of money and setting interest rates.
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The national budget shows the government’s planned income and expenditure for the year.
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A budget surplus is where planned income is greater than planned expenditure.
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The Central Bank of Ireland is responsible for the implementation of European Central Bank policy in Ireland and for regulating the Irish financial system.
Government regulation refers to the rules or laws the government puts in place to control or influence a specific market or population.
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Key Concepts
1. Name and explain three reasons for government intervention in an economy.
2. Explain what is meant by a government policy.
3. Name three types of policies the government may use to intervene in an economy.
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4. Distinguish between the government’s current and capital income. 5. List the top three sources of the government’s current income.
