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Benefits of Decreasing Government Spending


Discuss whether a decrease in government spending will benefit an economy.


Macroeconomic Factors and Policies

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I. 🍃Introduction
- Brief explanation of the topic
- Purpose of the outline

II. Reasons why lower government spending might be beneficial
- Lower inflation / demand-pull inflation
- Improve the current account position
- Reduce unemployment
- Increase the incentive to invest and work
- Enable growth of the private sector

III. Reasons why lower government spending might not be beneficial
- Cause cyclical unemployment
- Reduce the quality/skills/productivity of the labor force
- Worsen the current account position
- Cause cost-push inflation
- Lower living standards and increase poverty

IV. 👉Conclusion
- Summary of the main points
- Final thoughts on the topic

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