A Tax on Productive Activity Tends to _____

A tax on productive activity tends to _____

A) increase the real gross domestic product of an economy by increasing prices.
B) increase the gross domestic product of an economy by decreasing the opportunity cost of leisure.
C) decrease formal market activity because it lowers the return on such activity.
D) decrease activity in the underground economy because people are afraid of being connected with tax fraud.
E) increase the gross domestic product of an economy by ensuring that all market activities are reported.