What effect does budget deficit have on AD??
I think ....
That if budget deficit means ecess of budget exp. Over budget receipt it means government's expenditure is increasing which is a component of AD[C+I+G+(X-M)] so AD also increases
That if budget deficit means ecess of budget exp. Over budget receipt it means government's expenditure is increasing which is a component of AD[C+I+G+(X-M)] so AD also increases