Topic 10 - Public borrowing and public sector debt Flashcards
1
Q
Public sector net borrowing
A
Refers to a situation in which public expenditure is greater than tax revenue
2
Q
Structural budget deficit
A
This is the level of deficit even when the economy is at full employment
3
Q
Affects of structural budget deficit
A
- Increase in national debt
- Crowding out
- inflation
- Decrease in FDI
- Expenditure of infrastructure
4
Q
National Debt
A
Is the total sum owned by a government to holders of government bonds
