Explain why a government budget deficit is likely to stimulate economic growth.

Here we are looking at macroeconomics.

A budget deficit means that Government spending (G) is greater than Tax revenue the government receives (T). This means there are more injections into the economy than withdrawals out of the economy. A budget deficit is likely to boost AD as AD=C+I+G+(X-M)

JB

Related Economics GCSE answers

All answers ▸

explain the function of fiscal policy


Explain the term Economies of Scale. You may use a diagram to help.


Explain the difference between direct and indirect costs.


Explain how a monopoly affects competition in a market