Answer:
1. decrease taxes
2. increase government spending
Explanation:
GDP stands for Gross Domestic Product. It is a country total produces in terms of services and goods in an fiscal year or financial year.
According to the question, if the real GDP drops, then a fiscal policy to increase the GDP, the Government should decease the taxes as it will motivate the workers and the employees to work more to increase the products.
Also increasing the spending of the Government in the form of subsidies so that output will increase.
Therefore, the possible fiscal solutions to make the real GDP rise to a higher level are :
1. decrease taxes
2. increase government spending
The possible fiscal policy solutions to return the real GDP to its higher production level is to reduce the taxes and increase government spending.
GDP is the abbreviation for Gross Domestic Product. In a fiscal year or financial year, it is defined as the entire output of a country in terms of services and goods.
According to the information, if real GDP falls, the government should reduce taxes as a fiscal strategy to improve GDP, as this will incentivize workers and employees to work harder to increase output.
As a result, there must be increasing the spending of the Government in the form of subsidies so that output will increase.
Therefore, lowering taxes and increasing government expenditure are two feasible fiscal strategies for increasing real GDP.
Learn more about the GDP, refer to:
https://brainly.com/question/15682765
