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

3021 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

8 What is likely to happen when the rate of interest increases? A) consumer spending increases B) firms buy fewer machines C) people hold more cash D) savers earn lower rewards


Explain the law of demand with the help of a diagram.


Explain what a balance of trade deficit is


Explain one negative externality that could occur due to the building of a new airport.


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