what role taxes policy plays in determining the GDP or national income in an economy? Explain with numerical examples
Answers
Gross Domestic Product (GDP) is one of the most widely used measures of an economy’s output or production. It is defined as the total value of goods and services produced within a country’s borders in a specific time period — monthly, quarterly or annually. GDP is an accurate indicator of the size of an economy and the GDP growth rate is probably the single best indicator of economic growth while GDP per capita has a close correlation with the trend in living standards over time.
.Gross Domestic Product (GDP) is the monetary value of all finished goods and services made within a country during a specific period.
.GDP provides an economic snapshot of a country, used to estimate the size of an economy and growth rate.
.GDP can be calculated in three ways, using expenditures, production, or incomes. It can be adjusted for inflation and population to provide deeper insights.
.Though it has limitations, GDP is a key tool to guide policymakers, investors, and businesses in strategic decision making.
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The role taxes policy determining the national income in an economy.
Explanation:
- Taxes play a major role in determining the GDP of the nation by impacting the demand for goods and services. Encouraging businesses to hire and invest more.
- A higher tax to GPD ratio is the better will be financial position f the nation. A low tax ratio on GDP has many challenges for the government such as a challenge to spend more money, create infrastructure, and raise investments.
- The tax policy affects the levels of economic activity and forms a component of the fiscal policy. It helps to determine the rate of money flow in the economy and helps in evaluating the GDP of the nation.
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- brainly.in/question/18030039 answered by rambabuemailid.