A persistent recession leads to low revenue receipts of the government?
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Economic recession is a situation when low AD leads to low investment and therefore, low growth rate of GDP. When growth rate of GDP falls, tax revenue of the government (through direct as well as indirect taxation) tends to suffer. Implying slowdown of revenue receipts of the government during recession.
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When growth rate of GDP falls, tax revenue of the government (through direct as well as indirect taxation is bound to remain low , implying slowdown of revenue receipts of the government during recession.
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