A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Feb/Mar 2022 · Q141 Mark
To improve its financial position, a government decided to reduce expenditure on investment in the public sector. There was not a fall in economic growth. What was the most likely effect of the government's action?
AAn original budget deficit was reduced.
BAn original budget surplus was reduced.
CConsumer expenditure decreased.
DPublic sector productivity decreased.
✓ Correct answer
A: An original budget deficit was reduced.
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