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

2607 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

What are the benefits of an increase in the National Minimum Wage?


How do barriers to entry help monopolies maintain power?


What is an opportunity cost?


Explain two benefits to the government that falling unemployment provides.


We're here to help

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

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences