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Question Government deficits and debt. A-Are fiscal deficits and government debt a problem? Why/why not? B-What...

Question Government deficits and debt.

A-Are fiscal deficits and government debt a problem? Why/why not?

B-What advice would you give a heavily indebted government?

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Answer #1

A. Yes, fiscal deficit considered to be as a problem for any government because according to the definition of it, It is a deficit due to more importing and less exporting and this will cause the economy to suffer ion long run and results in many consequences like- decrease in domestic currency in foreign market, rise of prices, inflation in the market etc.

B. Following are some steps that can be taken by the government-

1. INCREASING THE TAX-Significantly Increasing the taxes on some item will actually benefit the government and helps in controlling the deficit

2.PRODUCTION-focus on more production in the domestic country so that the exports can be increased and with that employment opportunities will also be higher

3.REDUCE GOVERMENT SPENDING and limit it to where it is required actually like for giving subsidies to the poor peoples and promote sustainable development.

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