Question 3 (CLO3) (20 marks) According to the 2021 fiscal review, the government of Malaysia anticipated a fiscal defici

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Question 3 Clo3 20 Marks According To The 2021 Fiscal Review The Government Of Malaysia Anticipated A Fiscal Defici 1 (48.51 KiB) Viewed 9 times

Question 3 (CLO3) (20 marks) According to the 2021 fiscal review, the government of Malaysia anticipated a fiscal deficit of 5 percent of GDP between the periods of 2022 to 2024 due to fiscal consolidation. Discuss the economic impacts of the fiscal deficit on credit markets. Provide your analysis by adopting the traditional view and the classical view (Ricardo's view of the economic effects of the federal government's budget deficit). Based on the anticipated fiscal deficit in 2021, do you think the government is facing a high default risk? Do you think the government will be able to pay the debt? Why and how? Provide your arguments.