Practice

Free response question

Macroeconomics · Hard · 30 marks

IEO past paper: 2023 International Economics Olympiad, open questions

Open Question 3. Public Debt Policy The sovereign debt crisis in Europe and the fiscal deficit crisis in the United States have triggered global attention on government debt.

(a)Why is it necessary to control the government budget deficit reasonably and effectively? Please explain in detail some positive and negative effects of budget deficit on a country's economic development.[30]

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