Fiscal policy and budget deficit, Business Economics

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Question 1:

(a) How do taxes affect the economic well-being of market participants?

(b) Explain the link between fiscal policy and budget deficit.

Question 2:

Write briefly on any five of the following.
(a) Free rider problem
(b) Negative and positive externalities
(c) Public goods
(d) Automatic stabilisers
(e) Self-interest theory of government
(f) Social Production Possibility Schedule

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