Would it be possible for an increase in taxation to decrease the ...

[ashley]

Would it be possible for an increase in taxation to decrease the gross domestic product measured in the U.S.? Why or why not?

Question 2

Scarcity:
 a. ensures that people become satisfied with less than what they want.
  b. exists only during a recession.
  c. exists only in some countries.
  d. affects only poor people.
  e. requires people to make choices to satisfy their wants.

[kaylee05]

Answer to Question 1

Yes, it would be possible for an increase in taxation to decrease GDP. Higher levels of taxation would provide an incentive for more individuals and business to attempt to avoid taxation either legally or illegally. Such illegal activities would lead to an increase in the underground economy but a decrease in GDP.

Answer to Question 2

e