2.6.2. Fiscal Policy - Budget Deficits Surpluses and Debt (Edexcel A-Level Economics Teaching PowerPoint)

This Edexcel teaching powerpoint covers Fiscal Policy - Budget Deficits Surpluses and Debt

• Fiscal deficit: This is the difference between the government's spending and its revenue in a given year. If government spending is higher than its revenue, it is said to have a fiscal deficit. The government must then borrow money to finance the deficit, which increases the national debt.
• National debt: This is the total amount of money that the government has borrowed over time to finance its deficits. The national debt is the cumulative sum of all past fiscal deficits. It's like a credit card debt, if you will - the government is borrowing money to pay for expenses that it cannot afford in the short term. The national debt can grow over time if the government continues to run deficits and borrows more money to cover the gap.