4.5.3 Public sector finances

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Question 6

In 2015, the Canadian federal government abandoned its commitment to maintaining a balanced budget, opting instead to plan for deliberate fiscal deficits. This policy shift occurred alongside a sharp decline in global crude oil prices, which significantly reduced Canada's export revenues.

Explain one reason why a government might choose to run a budget deficit rather than pursuing a balanced budget during an economic slowdown caused by an external commodity shock.

[2]

4.5.3 Public sector finances

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Question 6

In 2015, the Canadian federal government abandoned its commitment to maintaining a balanced budget, opting instead to plan for deliberate fiscal deficits. This policy shift occurred alongside a sharp decline in global crude oil prices, which significantly reduced Canada's export revenues.

Explain one reason why a government might choose to run a budget deficit rather than pursuing a balanced budget during an economic slowdown caused by an external commodity shock.

[2]

4.5.3 Public sector finances

Question 6

4.5.3 Public sector finances Questions

4.5.3 Public sector finances

Question 6

4.5.3 Public sector finances Questions