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

2952 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

Explain one consequence of a more globalised world?


What is the law of demand?


Explain how the UK tax and benefit system is used to redistribute incomes


What are supply side policies and how do they effect the economy?


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