Junior Certificate Business Studies - higher level

The Minister for Finance in his recent budget decided to:

- increase spending on roads;

- sell part of Aer Lingus;

- increase spending on social welfare;

- increase income tax rates.

From the above decisions identify one example in each case of:

(i) Government Current Expenditure;

(ii) Government Capital Income;

(iii) Government Capital Expenditure.

John works as an office manager. He owns a house and a motor car. He has four young children and a large mortgage on his house. He is considering not renewing the insurance on the house and car due to increased insurance costs.

(i) What is the term used for the amount paid by John to take out insurance?

(ii) Is John required by law to insure?

- His house;

- His car.

Explain your answer in each case. (6)

(iii) Outline two possible reasons why John's insurance costs have increased.