Recently, the smoking ban came into affect in England. However, in Scotland the ban on smoking in public places has been in force since March 2006.

Statistics recently released suggest that this is the primary reason for the dramatic 17% fall in heart attacks.

Experts suggest that even a small amount of passive smoking can seem to be a trigger which causes heart diesease.

"The correlation between passive smoking and heart attacks is now excellently documented," says Tobias Raupach, the scientific director of an center for people who want to quit smoking at the University Medical Center Göttingen. The peculiar thing is that, both with passive and active smoking, a minimal change can already lead to a large effect. Much as with an avalanche, a small stimulus can lead to a cascade of events

The evidence of Scotland is also backed up by studies in other areas which have introduced a smoking ban such as Italy and Ireland.

This suggests that the smoking ban is an effective method of government intervention and is perhaps more effective that raising taxes on cigarettes.

Other advantages of Smoking bans in Public Places.

1. Discourages people from starting smoking in the first place
2. Provides an incentive for people to stop.
3. Much harder to evade this law. For example higher taxes often lead to people buying from abroad.
4. You clothes don't smell really bad when you come back from a pub.

Disadvantages of Smoking Bans

1. I can't think of any, although smokers probably could.

See also: Should Taxes on Cigarettes be Increased

Good air - good health - article on smoking ban in Scotland

Labels: government

in 200/01 the UK's public expenditure was 37% of gdp this forecast to increase to over 42% of gdp by 07/08 examine the likely economic implications apart from increased tax of this trend.

Effect on AD

• If govt spends more by borrowing some of the increased spending, higher Government spending should increase AD, (G is a component of AD.) - see: Government borrowing
  
• However, if tax increases at same rate then net effect on AD is likely to be neutral
• It depends whether government finances by borrowing or by tax
• Also, if higher spending is financed by borrowing it may cause crowding out
  

Effect on AS

• Higher government spending may increase productive capacity in the long run. For example, they may spend it on education and training e.t.c.
• However, if it is spent on paying for pensions e.t.c there will be no increase in productive capacity
• However, there is no guarantee that government spending will actually increase educational standards, there may be government failure
  
• Again, it depends what the government is spending its money on.

Efficiency Government vs Private Sector

How efficient is government spending compared to private sector spending. Higher government spending means a declining share of private sector spending and investment. Many economists argue government spending is more inefficient. THerefore, in the long run it can reduce productivity of the economy

Labels: government, readers questions

Explain Reasons for Increasing Government Spending. (10)

1. Improve Public Services

Higher government spending can lead to improved public services like health, education and transport. These are important for increasing the quality of life and economic well being

2. Increase Productive Capacity of Economy.

Some types of government spending, can help to overcome market failure. For example, education can help increase labour productivity and reduce structural unemployment; if the education spending is well targeted it can help to increase the long run trend rate of growth.

However, not all government spending is guaranteed to actually increase government spending, it may be subject to government failure and inefficiency.

3. Expansionary Fiscal Policy

Increased government Spending without higher taxes is likely to increase AD. It will cause a budget deficit, however, the increased Government spending is an injection of spending to the economy and could help to increase the rate of economic growth. Note, some monetarists argue increased government spending will just cause crowding out, and therefore it will not increase AD.

4. Reduce Inequality.

A significant % of government spending is spent on social security. This includes benefits, such as; unemployment benefit, income support, child benefit and housing benefit. The majority of these benefits are means tested; this means they are targeted to those on low incomes. The aim is to reduce relative poverty and inequality

• Fiscal Policy
• Government Intervention in the Macro Economy
  

Labels: government