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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 b... 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 by the government. Capital expenditure refers to expenditures that result in the creation of physical assets or improvements. By investing €2.2bn in social housing, the government is funding long-term projects that provide lasting infrastructure rather than immediate expense. This investment will benefit citizens over a number of years as it aims to provide permanent housing solutions.
Step 2
Outline two advantages of expenditure on social housing for the Irish economy.
Answer
- Reduced Homelessness: By providing more social housing options, the government can significantly reduce the number of homeless individuals. This leads to societal improvements, reduces strain on social services, and enhances the overall quality of life for citizens.
- Economic Growth: Investment in social housing creates jobs within the construction sector, stimulating economic growth. As jobs are created, there will be increased consumer spending, benefiting local businesses and contributing to the overall economic activity.
Step 3
Explain, using an example, one opportunity cost of this investment in social housing.
Answer
One opportunity cost of investing in social housing is the potential funds that could have been allocated to health services. For instance, if the government spends €2.2bn on building social houses, this money cannot be used to improve hospital facilities or invest in new medical technology, which could have immediate benefits for public health. An example could be the postponement of purchasing new ambulances, which directly affects emergency services.
Step 4
Step 5
State and explain one benefit of economic growth for each of the following in the Irish economy: Irish citizens.
Answer
Economic growth leads to an increased standard of living for Irish citizens. As the economy grows, job opportunities expand, leading to higher incomes. This allows individuals and families to afford better living conditions and improve their quality of life.
Step 6
State and explain one benefit of economic growth for each of the following in the Irish economy: Businesses.
Answer
For businesses, economic growth results in increased sales and profits. As consumers have more disposable income, they are likely to spend more on goods and services, allowing businesses to expand their operations and invest in further growth.
Step 7
State and explain one benefit of economic growth for each of the following in the Irish economy: Government finances.
Answer
Economic growth enhances tax revenues for the government. As businesses and individuals earn more, they contribute more in taxes, which allows the government to fund public services and infrastructure projects, ultimately benefiting society at large.
Step 8
Outline two reasons why countries may want to become members of the EU.
Answer
- Access to a Larger Market: Joining the EU allows countries to sell goods and services to a market of over 500 million consumers, facilitating trade and promoting business growth.
- Economic Growth: Membership provides access to funding and investment opportunities from the EU, which can help stimulate economic development and infrastructure projects in member states.
Step 9
Outline two possible economic disadvantages for Ireland of membership of the EU.
Answer
- Cost to Ireland: Membership fees contribute to the EU budget, which could mean that funds are taken from the national budget that could be used for domestic priorities.
- Pressure on Local Businesses: The removal of trade barriers may expose local Irish businesses to stronger competition from larger EU companies, jeopardizing their viability and potentially leading to job losses.