Falling GDP leads to higher transfer payments and lower tax receipts.

Name: Falling GDP leads to higher transfer payments and lower tax receipts.
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When GDP falls, there is typically an increase in people needing government assistance such as unemployment benefits and welfare. This leads to higher transfer payments. At the same time, lower economic activity means that taxable income and spending decrease, resulting in lower tax receipts for the government.

Falling GDP Leads to Higher Transfer Payments and Lower Tax