Question

If the government wishes to increase the level of real GDP, it might reduce Group of answer choices taxes. the size of the budget deficit. transfer payments. its purchases of goods and services.

Answer 1

Answer:

taxes

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Real GDP is GDP calculated adjusting for inflation. It reflects the value of goods and services produced in an economy.

Taxes are compulsory sums levied by the government or agencies of the government on the production or consumption of goods and services.

If the government reduces taxes, disposable income would increase and expenditure in the economy would increase. This would increase the level of real GDP