Answered: The increased government spending noted…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The belief that we can spend our way out of low growth is inconsistent with the best available
empirical evidence and ignores South Africa’s recent poor performance in using government
spending as a tool to unlock much‐needed economic growth. Gambling with our future on risky
economic strategies that have failed elsewhere is something we are not prepared to do.’ Tito
Mboweni is South Africa's Minister of Finance.

The increased government spending noted in Q.3.1. above has to be financed in
one way or another.
Describe three ways in which government spending can be financed.

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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