'evaluate the extent to which an increase in UK government borrowing is undesirable'

budget deficit

the difference between government spending and tax revenue, creating the need for government borrowing

government borrowing may be part of expansionary policy to support short run economic growth (explanation)

increase budget deficit - e.g. through increasing government spending or reducing direct taxation - increase in component of AD - increase in total expenditure - increase in total output - increase in short run growth

e.g. significant increases in UK government borrowing in response to recent significant issues such as Covid and energy prices crisis, to fun furlough scheme and EPG

the higher government debt from a higher budget deficit will be imposed costs on future generations

higher budget deficit - increase in government borrowing - increase total amount of bonds issued by government - increasing total debt - these bonds have interest payments - create opportunity cost for government - money could instead be spent on health and education that improve living standards

e.g. spending on interest payments on UK government debt now exceeds that spending policies

higher government borrowing could be used to support long run growth

increased government spending - used to finance spending on infrastructure - or lower taxes on business investment - improves quality of factors of production - improves mobility and productivity of capital and labour - shift LRAS

e.g. new capital allowances in the UK allows firms to pay less tax when they spend more on capital

conclusion

bad to have more government borrowing, as Uk debt levels are already considerable and interest rates on government borrowing have increased significantly