TAXATION & GOVERNMENT FINANCES

NATIONAL DEBT/GROSS DOMESTIC PRODUCT RATIO

The income of a country is measured by its GDP (Gross Domestic Product)

The ND/GDP ratio reflects our debt as a percentage of what we earn each year.

In the 1990’s the ND/GDP was very high @ 90% which meant that we were borrowing nearly as much as we earned.

During the boom the ratio decreased to 25% due to lower borrowings and a higher GDP.

However the ratio has started to rise again to ???

Look up!

2004 Q 8 (B) P 42

In recent years Ireland’s ND as a percentage of GDP has declined.

Discuss the economic consequences of this development for the Irish Economy.

Note this could be now asked in reverse due to our current economic situation.

ANS TO BOTH SIDES

Annual interest repaymentsWill decrease as the ratio decreases and

increase as the ratio increases. Government Current ExpenditureWill increase as the ratio decreases and

decrease as the ratio increases. Burden on future taxpayersWill decline as the ratio declines and will

increase as the ratio increases.

International credit-ratingWill improve as the ratio decreases and will

disimprove as the ratio increases.

o Spending on infrastructureMay decrease if the decrease in the ratio is due

to less borrowing for capital projects which may inhibit future growth.

HoweverIf the ratio increases due to increased

borrowing for capital projects then spending on infrastructure will increase.

EXAM QUESTION ORDINARY LEVEL

2009 Q 4 P 102 2008 Q 5 & 6 (a) P 111 2007 Q 7 P 121 2006 SQ 3 & 4 P 124 & Q 8 (a) (b) P 130 2005 SQ 5 P 133 & Q 8 P 138 2004 SQ 8 P 141 2004 Q 8 (c) P 146 2003 Q 5 P 153 2002 SQ 9 P 157 & Q 6 P 161 2001 SQ 7 P 170

EXAM QUESTIONS ON TAX

2003 Q 1 Reg Tax P 44

2002Q 6 Tax av & ev P 52

2008 Q 6 2007 Q 5 P 20 2006 Q 5 (a) (c) P 27 2005 Q 4 2004 Q 8 2001 Q 7 1999 Q 5 1998 Q 4

Short Long

EXAM QUESTIONS ONGOVERNMENT FINANCES

2006 Q 8 NTMA 2005 Q 5 PSBR 1999 Q 5 PSBR 1998 Q 6 Tax Wedge

2009 Q 2007 Q 5 & 8 (c) 2006 Q 5 (b) 2004 Q 8 (b) (c) 2002 Q 7 (b) 2001 Q 7 2000 Q 8 1997 Q 7

Short LONG