Under a progressive tax system:
A)the average tax rate increases with increases in real GDP.
B)the average tax rate remains constant with changes in real GDP.
C)the average tax rate falls with increases in real GDP.
D)government tax receipts increase when the economy is in a recession.
E)government tax receipts decrease when the economy is expanding.

Question

Quizplus · Accepted Answer

Under a progressive tax system, as real GDP increases, individuals and entities earn more income, which pushes them into higher tax brackets, thereby increasing the average tax rate.

Under a Progressive Tax System