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Question : During a boom, the deficit of the government will reduce automatically due to_________.

Option 1: increase in tax revenue

Option 2: increase in GDP

Option 3: decrease in tax revenue

Option 4: decrease in GDP


Team Careers360 10th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: increase in tax revenue


Solution : The correct answer is an increase in tax revenue.

During a boom, the government's deficit may be reduced due to increased tax revenues. During an economic boom, there is typically higher economic activity, increased business profits, and higher incomes for individuals. This leads to an automatic increase in tax revenues for the government.

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