Ans 1: If the level output in a country falls in a particular year, then it is said to be the decreasing the GDP. It is mainly due to decrease in consumption, government purchase, net export or investment. When these components are decreasing then it is known as decreasing GDP. Ans 2. The GDP can be increase by government through various measures: 1. Increasing government purchase. 2. Loose monetary policy 3. Decrease in rate of tax 4. Measures to be taken to increase the consumption Ans 3. Yes, the specific component of GDP that can be increase is government purchase. The government may increase its spending on infrastructure development to increase the declining GDP