How Gdp Affects Economic Growth

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1. Using the figures from the chart briefly compare and contrast the level of government spending between the UK, Sweden and the USA The Swedish government spend more than the UK and USA because they are more of planned economy which means most firms are run by the government showed on the graph through the great differences of percentage. However the Swedish government has started to be less involved in the spending due there being free market businesses in contrast of the USA from the beginning the government’s involvement in spending has been minimal due to the vast amount of entrepreneurs. The UK is more of a mixture of a planned economy and free market. 2. What kind of areas does government spending occur and what is its purpose? Government spending usually occurs in the services such as education, healthcare, roads etc. this is because if the government take control of this everyone will be able to receive these service whereas if it was ran by firms they will only cater to the consumer that could afford the services. 3. What was the aim of Thatcher? Margret Thatcher’s aim was to transform the UK mixed economy into a free market economy. 4. Why do entrepreneurs play a central role in free markets? Entrepreneurs play a central role in a free market because without the entrepreneur there is no business/firm. Also they have to ensure that resources that have been purchase have been used efficiently in order to receive maximum profit. 5. Identify two areas of government regulation and explain why this can be seen as a bad thing for businesses. Taxation may lead to businesses being driven out of the country due to high taxes and due to this businesses will move to countries with lower tax rates to maximise their profits. Building regulation stops the growth of businesses because without the approval of the government businesses’ cannot expand

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