Question

What happens when the fiscal deficit increases?

Answer 1

A fiscal deficit can help a sluggish or lazy economy. Cash spent on the formation of useful resources sets out ventures and opens doors for finding jobs. Financial deficit increases due to non-resource creation, for example, government assistance measures, gives rise to the purchasing power to the people living below the poverty line, in this manner helping in launching a recessionary economy.

Also see:

• Budget Deficit
• Trade Deficit
• Primary Deficit