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g how is investment spending affected by an increase in the budget deficit? group of answer choices investment spending increases to finance the deficit. investment spending increases as a result of the increase in government spending. investment spending is crowded out by the increase in the budget deficit. investment spending is unaffected by the increase in the budget deficit which affects only government spending.

Respuesta :

The rise there in budget deficit displaces investment spending.

Why does the government have a budget deficit?

Although the precise roots of a deficit in government spending can be difficult to pinpoint, they are typically brought about by low taxation and heavy spending. This is so because taxes, which are the gov't's main source of income, are low, which indicates that the government's overall income is also low.

Is a budget deficit good?

Even though a shortfall budget is often regarded as a negative omen for the market, it can also be advantageous during recessions since it results in lower taxes or increased public spending, both of which serve to revive the economy.

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