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Following Budget 2015 the Government announced plans to spend €2.2bn on social housing over the next three years - Leaving Cert Economics - Question 7 - 2015
Question 7
Following Budget 2015 the Government announced plans to spend €2.2bn on social housing over the next three years. Note: Social Housing refers to housing supplied by ... show full transcript
Worked Solution & Example Answer:Following Budget 2015 the Government announced plans to spend €2.2bn on social housing over the next three years - Leaving Cert Economics - Question 7 - 2015
Step 1
Does this spending on social housing represent current expenditure or capital expenditure by the government? Explain your answer.
Answer
This spending on social housing represents capital expenditure as it involves substantial investment into building new housing, which is a long-term asset. Unlike current expenditure, which covers day-to-day operational costs, capital expenditure is associated with purchasing or improving long-lasting resources. Citizens will benefit from enhanced housing options over a long period, making it a significant investment.
Step 2
Outline two advantages of expenditure on social housing for the Irish economy.
Answer
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Reduced Homelessness: Increased availability of social housing will provide homes for individuals and families currently homeless, improving the overall quality of life.
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Economic Growth: The construction and maintenance of social housing will create jobs in multiple sectors, from tradespeople to suppliers, thus stimulating the economy and increasing tax revenues.
Step 3
Explain, using an example, one opportunity cost of this investment in social housing.
Answer
An opportunity cost of investing in social housing could be the funds that are not available for other public services, such as healthcare or education. For example, if the government allocates €2.2bn to social housing, this resource could have been used to construct new hospitals or fund educational initiatives, which also have significant benefits for society.
Step 4
Step 5
State and explain one benefit of economic growth for Irish citizens.
Answer
Economic growth can lead to increased employment opportunities. As businesses expand due to higher consumer demand, they require more workers. Therefore, job availability will rise, allowing citizens to improve their living standards through better employment.
Step 6
State and explain one benefit of economic growth for businesses.
Answer
Higher sales and profits represent a key benefit for businesses during periods of economic growth. As consumers are more likely to spend, businesses can realize increased revenue, allowing them to invest further in expansion, innovation, and employee development.
Step 7
State and explain one benefit of economic growth for government finances.
Answer
Economic growth leads to higher tax revenues for the government. Increased business activity and consumer spending generate more income and value-added tax (VAT), allowing for greater public spending on services and infrastructure.
Step 8
Outline two reasons why countries may want to become members of the EU.
Answer
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Access to a Larger Market: EU membership allows countries to sell to a market comprising over 500 million consumers, ensuring broader economic opportunities for businesses.
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Economic Growth: By reducing trade barriers, member countries can enhance their economic growth through increased trade and investment, improving their overall economic conditions.
Step 9
Outline two possible economic disadvantages for Ireland of membership of the EU.
Answer
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Cost to Ireland: As a member of the EU, Ireland must contribute to the EU Budget, which could put a strain on national finances if the benefits are not proportionate to the costs.
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Pressure to Adopt EU Policies: Ireland may face pressure to comply with regulations and directives set by the EU, potentially leading to additional bureaucracy and costs associated with compliance.