Increased government spending help marginalized temporary growth exhibited economy in the short term, but created the risk of long-term instability like inflation and financial risk due to the lack of effectiveness of public spending and the lack of monitoring mechanisms to ensure the healthy functioning of the fiscal month. Economic theory does not indicate clearly the direction of the impact of government spending for economic growth. But economists agree that Government spending once beyond a certain threshold will impede economic growth by causing resource allocation in a manner that leads to inefficient State budget deficit and eventually cause inflation.
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