Reasons as to why the government may deliberately plan for a deficit budget OR. Why may the government under take Deficit financing?
- To stimulate aggregate demand by increasing money supply in the economy
- To improve on the standards of living by increasing disposable incomes of the
- To lift the economy out of a depression (stagnation) through increased government
- To increase employment opportunities by increasing production and investment in the
- To cater for the effects of the unforeseen circumstances, for example drought, epidemics, earthquakes
- To raise government revenue especially in situations where borrowing is a quicker and cheaper source of government revenue as compared to
- To reduce the tax burden on the tax payers especially in situations where taxable capacity is too low due to high levels of of production
CATEGORIES Economics
TAGS Dr. Bbosa Science
