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

2917 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

Explain why firms in the pharmaceutical industry can charge different prices for the same drug in different countries. (15 marks)


How would you structure a 6 mark essay question?


What are the factors that could affect the exchange rate?


Explain the law of demand with the help of a diagram.


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