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
Answered by James B. Economics tutor

3137 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

What does consumer surplus mean?


Evaluate one reason why trade may be beneficial for an economy (5 marks)


Using Figure 5, assess whether the decision to install the machine (used in production in an independent fast food shop) will be beneficial for the business and the workers.


Explain what is meant by a negative externality and give an example of a negative externality that arises from fuel consumption.


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning