Question

One of the most significant problems facing governments with low GDP is that a low GDP often results in __________. A. lower-than-average infant mortality rates B. less available tax revenue C. increased economic growth D. lower unemployment rates

Answer 1

Answer:

B. less available tax revenue

Explanation:

Economists traditionally use the gross domestic product (GDP) to estimate economic development. If GDP is increasing, the economy is in excellent state, and the state is proceeding ahead. If GDP is decreasing, the economy is in crisis, and the state is suffering ground.

Gross Domestic Product (GDP) is a commercial measure of the business value of all the concluding goods and assistance created in a space of time, usually yearly or periodically. Unnecessary GDP estimates are generally used to define the economic achievement of an entire country or area, and to make global judgments.

Answer 2

The answer to the question above is "B. less available tax revenue" based on the GDP calculation formula. The GDP calculation formula is stated as GDP = C + I + G + (Ex - Im) where C is consumers spending, i is investments, G is government spending, and (Ex - Im) is the difference between export and import. A low GDP means a low spending has occurred in the country which results in a decrease in tax revenue.