rising budget deficits and national debt

Question 1

budget deficit and different types and national debt

Answer 1

-when gov spending is greater than tax revenue
-structural budget deficit deficit at full;l employment
-cyclical budget deficit: deficit in a recession
-national debt: total stock of gov debt over time

Question 2

pros of budget deficit

Answer 2

-higher growth, low unemployment
-education, healthcare, infrastructure, pubic services
-redistribution of income
-incentives of tax cuts

Question 3

cons of budget deficit

Answer 3

-deterioration of finances
-inflation conflict
-current account deficit

Question 4

evaluation of budget deficit

Answer 4

-state of finances
-short run vs long run
-stage of cycle
-specfici policy
-confidence
-automatic stabilisers