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Subjects · Leaving Cert Economics

Leaving Cert Economics: Budget, fiscal policy & debt

How often Budget, fiscal policy & debt comes up on the Economics papers, every year it was asked, and questions to try.

HL Asked on 4 of the last 5 Higher Level papers, most recently in 2025. most years

OL Asked on 5 of the last 5 Ordinary Level papers, most recently in 2025. banker

Budget, fiscal policy & debt, Higher Level(7 marks)

Quick ones on Budget, fiscal policy & debt.

(a)Which is current government expenditure?
  1. Building a new motorway between cities
  2. Paying nurses' and teachers' salaries
  3. Constructing a new regional hospital
(b)A government's revenue is €90bn and its expenditure is €96bn. Its budget balance is…
  1. A €186bn deficit
  2. A €6bn surplus
  3. A €6bn deficit
(c)Expansionary fiscal policy involves…
  1. Cutting taxes and/or raising government spending
  2. Raising taxes and cutting government spending
  3. Raising interest rates to cut borrowing
Show the answers

(a) Paying nurses' and teachers' salaries

(b) A €6bn deficit

(c) Cutting taxes and/or raising government spending

Your turn: Higher Level questions on Budget, fiscal policy & debt.

Higher Level

Asked on 4 of the last 5 Higher Level papers, most recently in 2025. most years

Every paper, year by year

YearWhere it came up
2025Q12, Q15
2024Q13, Q16
2023Not asked
2022Q13
2021Q7

Links open the State Examinations Commission’s paper for that year.

More Budget, fiscal policy & debt questions

Budget, fiscal policy & debt, 3 marks

Why may borrowing to pay for new infrastructure be justified?

  1. Borrowed money never has to be repaid
  2. Infrastructure has no opportunity cost
  3. Future users who benefit also help repay it
Show the answer

Future users who benefit also help repay it

Roads, rail and schools last for decades, so spreading their cost over time matches who benefits. Borrowing for day-to-day spending lacks this logic.

Budget, fiscal policy & debt, 2 marks

Which body independently assesses whether Irish budgets are prudent?

  1. IDA Ireland
  2. Irish Fiscal Advisory Council
  3. Central Statistics Office
Show the answer

Irish Fiscal Advisory Council

Set up after the financial crisis, the Fiscal Council checks the Government's forecasts and whether budgets follow the fiscal rules. The CSO publishes data.

Budget, fiscal policy & debt, 3 marks

Fiscal policy is pro-cyclical when a government…

  1. Spends more and cuts taxes during a boom
  2. Cuts taxes during a recession
  3. Saves its surpluses during a boom
Show the answer

Spends more and cuts taxes during a boom

Pro-cyclical policy adds fuel to booms and deepens recessions, as happened in Ireland before 2008. Counter-cyclical policy leans against the cycle instead.

Ordinary Level

Asked on 5 of the last 5 Ordinary Level papers, most recently in 2025. banker

Every paper, year by year

YearWhere it came up
2025Q2, Q12, Q13, Q15
2024Q14
2023Q12
2022Q10, Q13
2021Q1, Q7, Q13, Q14

Links open the State Examinations Commission’s paper for that year.

More Budget, fiscal policy & debt questions

Budget, fiscal policy & debt, 2 marks

Which Minister announces Budget tax changes to the Dáil?

  1. The Minister for Enterprise
  2. The Minister for Foreign Affairs
  3. The Minister for Finance
Show the answer

The Minister for Finance

Each year the Minister for Finance sets out tax changes in the Budget, and the Minister for Public Expenditure sets out spending plans. The Dáil then votes on them.

Budget, fiscal policy & debt, 2 marks

A budget deficit occurs when?

  1. Exports are less than imports in a year
  2. Government spending is greater than revenue
  3. Revenue is greater than government spending
Show the answer

Government spending is greater than revenue

If the state spends more than it collects in taxes and other revenue, it must borrow to cover the gap. The opposite is a budget surplus. Exports less than imports is a trade deficit.

Budget, fiscal policy & debt, 3 marks

Government revenue is €90bn and spending is €85bn. The budget balance is?

  1. A surplus of €5bn
  2. A deficit of €5bn
  3. A surplus of €175bn
Show the answer

A surplus of €5bn

Budget balance = revenue - expenditure = €90bn - €85bn = +€5bn. A positive result is a surplus.

Other Economics topics

All of Leaving Cert Economics