Explain why a government budget deficit is likely to stimulate economic growth.

When there is a government budget deficit it means that the government spending is greater than the government revenue, hence there is more money being channeled into the economy. This money can be used to invest in transport or infrastructure and so stimulating economic growth as increased jobs and opportunities arise.

HC
Answered by Hattie C. Economics tutor

3107 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

What is the effect of a rise in Interest rate on the level of growth in the economy?


Discuss how effective a reduction in income tax would be in encouraging economic growth.


Explain why the demand for food is relatively price inelastic


Explain one benefit of the UK developing free-trade agreements with non-EU countries


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