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4.5.3 Public sector finances

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Question 22

In 2019, the government of Colombia committed to a fiscal rule designed to limit its budget deficit to no more than 1.5% of GDP. However, following a series of external economic shocks, the government suspended this fiscal rule.

Explain one likely reason why a government might suspend a fiscal rule that limits the size of its budget deficit during an economic downturn.

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4.5.3 Public sector finances Questions

  1. A Level
  2. /Economics
  3. /4.5.3 Public sector finances