Economics
Study Notes
Fiscal Policy - Causes of a Budget Deficit
- Level:
- AS, A Level, IB
- Board:
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 3 Jul 2018
Governments in many countries run persistent annual fiscal deficits. A budget deficit occurs when tax revenues are insufficient to fund government spending, meaning that the state must borrow money, usually in the form of government bonds.
Revision video: Key Causes of Cyclical and Structural Budget Deficits

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