From fiscal year 2012 to fiscal year 2013 China's budget deficit rose 50%.Other things the same,we would expect this to have

Question

Quizplus · Accepted Answer

An increase in the budget deficit typically indicates an increase in government borrowing, which can lead to an increase in interest rates. Higher interest rates make borrowing more expensive, leading to a decrease in investment. Therefore, we would expect an increased budget deficit to result in increased interest rates and decreased investment.

From Fiscal Year 2012 to Fiscal Year 2013 China's Budget