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Economics tuesday project - Assignment Example

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When government spending rises, it leads to a rise in real GDP as a first step and then leading to a rise in income. The extra amount of tax is deducted from this increased income only at the second stage and that is why the effect of the rise in real GDP for a rise in…
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Economics tuesday project

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Economics tuesday project

Download file to see previous pages... Hence, exports drop leading to an international trade deficit.
8. During recessions, the government strives to increase the amount of real GDP and hence income in the economy. One way by which it can accomplish this is through increasing its expenditures and keeping its tax revenues low at the same time, which however leads to government budget ...Download file to see next pagesRead More
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