Answer to Question #54330 in Macroeconomics for Akash

Question

A decrease in tax to GDP ratio of a country indicates which of the following?
1. Slowing economic growth rate
2. Less equitable distribution of national income
Select the correct answer using the code given below.
(a) I only
(b) 2 only
(c) Both 1 and 2
(d) Neither I nor 2

Answer 1

A decrease in tax to GDP ratio of a country indicates less equitable distribution of national income, because less taxes are collected to redistribute the national income, so the right answer is:
(b) 2 only