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
Related Economics GCSE answers
All answers ▸How should put in my essays for 25 mark questions?
What's the difference between movements along and shifts in the demand curve?
Identify policies a government can use to achieve economic growth.
What's the difference between a normal good and a inferior good?