Economics · Fiscal Policy and Budget
How does a budget deficit typically affect a nation's economy?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It indicates a surplus in government spending.
- 2It may lead to increased government borrowing.✓
- 3It results in a decrease in public spending.
- 4It always leads to immediate economic growth.
Correct answer
It may lead to increased government borrowing.
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