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

When there is a government budget deficit it means that the government spending is greater than the government revenue, hence there is more money being channeled into the economy. This money can be used to invest in transport or infrastructure and so stimulating economic growth as increased jobs and opportunities arise.

HC
Answered by Hattie C. Economics tutor

3188 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

What is meant by the term opportunity cost?


Why should the government consider the price elasticity of demand when imposing tax on goods?


What is the difference between a contractionary and expansionary fiscal policy?


What are the main macroeconomics variables?


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