Question

Agree or disagree (7 sentences)

A budget deficit is when an individual, business, or government budgets more spending than there is revenue available to pay for that spending. Deficits are the debts accumulated over time from the spending. It affects interest rates because the higher the deficit gets, the higher the interest rates go. When the budget deficits go up, the investment numbers decrease. This also tends to make economic growth decrease as well. So in conclusion, when the budget deficits get out of hand and start going up, everything else takes a turn for the worse as well

Answer 1

I agree.

• A budget deficit is a situation where the spending exceeds the revenue received,it can be related to an individual.a business.or the government,it is not a desirable situation and is an indicator of the financial health of the said concern.
• When a deficit is not paid in time,and carried forward it increases debt,so each years unpaid deficit makes an addition to the total debt.
• Deficits are thus accumulated debts where the spending exceeds the revenue continually
• Deficits give rise to increased interest rates as well as decreased investment which eventually decrease the economic growth.
• During deficits,as borrowing increases the interest rates rise which makes borrowing costly adding to the deficit.
• It is also very difficult to find investors as there is speculation about the return of investments,investors fear loosing their money due to bankruptcy.
• Budget deficits are thus undesirable situations which,reduce saving,increases interest rates deteriorates future income,so if budget deficit goes out of hand it affects the other aspects as well.