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

2711 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

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


Are living standards always lower in developing countries than developed countries?


Explain the factors which determine the level of demand for a good or service


Describe what is economies of scale?


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:

© 2025 by IXL Learning