Question

what are the effect of budget deficit to the economy ​

Answer 1

Heya....❤❤❤

here is ur answer....

A budget deficit implies lower taxes and increased G, this will increase AD and this may cause higher Real GDP and inflation. If the govt sells more bonds this is likely to cause interest rates to increase. This is because they will need to increase interest rates in order to attract investors to buy the extra debt.

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