Answer to Question #70128 in Macroeconomics for anita

Question

Consolidated government expenditure is expected to grow 7.1 per cent over the medium term, reaching R1.69 trillion in 2018/19. At this rate, spending growth will outpace inflation by 0.8 per cent. (Source: www.treasury.gov.za)
1.Describe the main instruments of fiscal policy that are available to government.
2.Drawing from the statement above, how can government finance increased expenditure?
3.What are the possible negative effects of 2 above?

Answer 1

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