Austerity Measures in Greece Paper

Business Finance

Using your knowledge of the impact of the government’s budget on the equilibrium level of real GDP, and your understanding of the effect of the economy on the state of the government’s budget, explain why austerity measures usually result in less improvement in the government’s budget position than policymakers had hoped for. Be sure to define what we mean by ‘the governments budget.

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this hint were given:

This one is straight forward. How do austerity measures affect economic growth and the government’s budget? Remember that Greece was suffering from considerable budget deficits and austerity measures mean tight fiscal policy. This should take no more than 2 paragraphs

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