Question

What is the effect of a government budget deficit on the real interest rate and investment? a government budget deficit _______ the real interest rate and _______ investment

Answer 1

The government budget deficit does not influence the real interest rate. The real interest rate is 9 percent a year.

What do mean by government budget?

A government budget is a document created by the government and/or another political institution that details proposed spending and tax revenue estimates for the upcoming fiscal year. The budget is typically presented to the legislature in parliamentary systems, and it frequently needs their approval.

A government budget is a document that details the anticipated income and expenditures for a given fiscal year for a given governing body. Government spending plans frequently need legislative approval and are vulnerable to political pressure from interest groups vying for funding.

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