A rise in government expenditure can lead to

Assessment: WAEC SSCE - Economics - 2011 (Objective) Subject: Economics

Question 1 Report

A rise in government expenditure can lead to

Answer Details
A rise in government expenditure can lead to higher inflation. This is because an increase in government expenditure means that there is more money available for people to spend, which can lead to a higher demand for goods and services. When demand is high, prices tend to go up, which leads to inflation. Additionally, government expenditure can increase the money supply, which can also contribute to inflation.
Read lesson note on Public Finance (JAMB)
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