What is a possible result of a reduction in the budget deficit on the circular flow of income?

Define Budget Deficit and Circular flow of income 2) Results = A reduction in the budget deficit leads to a reduction in net injections(government spending is an injection). Therefore a reduction in the budget deficit means that the government is reducing their spending. This therefore results in a reduction of the money flowing around an economy (circular flow)

Answered by Adriana A. • Economics tutor

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