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)

Answered by James B. Economics tutor

2372 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

Explain why a rise in GDP will lead to a rise in the standard of living


What is an oligopoly?


Name four changes that would cause an increase in an individual consumer's demand for a good or service.


Explain what the possible results could be from increasing the Euro/US dollar exchange rate (you are Euro)


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo
Cookie Preferences