Question

Suppose Singapore had a large budget deficit. What economic market forces would be set in motion that might cause a deficit in the Singapore’s net balance on goods and services?

Answer 1

Considering Singapore had a large budget deficit. Meaning it's expenses are more than its revenue, if this goes on to affect the trade balance, which would mean Singapore had to import more than it exports, might affect Singapore negatively. Economic forces such as recession in the market and government not spending enough in fear of rise in fiscal deficit would impact the goods and services export as companies then have less demand and manufacture less products. Incentivising less on exports would also impact the trade balance severely. Slowing global demand for its exports would also pose a threat.