Y1 33

Question 1

Budget deficit

Answer 1

When government spending> tax revenue in a year

Government borrowing in a year

Question 2

Structural budget deficit

Answer 2

Budget deficit at full employment

Question 3

Cyclical budget deficit

Answer 3

Budget deficit in a recession

Question 4

National debt

Answer 4

Total stock of government debt overtime

Question 5

Prosof budget deficit

Answer 5

Higher growth lower unemployment
Benefits of increased government spending
ReDistribution of income
Incentives of tax cuts
Crowding in

Question 6

Cons of budget deficit

Answer 6

Deterioration of government finance
Inflation conflict
Crowding out effect
X inefficiency


Question 7

Cons of budget deficit
Deterioration of government finances

Answer 7

Budget increases national debt figures are rising safe
Gonna be lower confidence in the state of government finances reflected and lower credit ratings on government bonds meaning the government would try to entice people to buy government bond to offer higher coupon rates higher interest rates making it harder for government to borrow money overtime
Burdens, future generations
Taxes rises et cetera