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

2983 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

Evaluate the case that economic growth is always beneficial to a country


The National Living Wage (NLW) government policy target is to increase the NLW to £9 per hour by 2020. Explain two possible impacts of this policy on the UK supermarket industry.


Evaluate the impact of a fall in the price of oil on the market for diesel cars


Which factors affect supply and demand?


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