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

  1. 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)
AA
Answered by Adriana A. Economics tutor

5430 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Outline and evaluate the economic effects of a fall in the value of the dollar?


Why is the demand for a Ford Car more 'elastic' than the demand for petrol?


How does an increase in Bank rate lead to lower inflation? Explain using the monetary policy transmission mechanism.


What is the difference between external and internal economies of scale?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences