In a(n) tax system, the average tax rate falls as GDP rises.

Answer 1

In a progressive tax system, the average tax rate typically increases as GDP rises, as higher incomes are taxed at higher rates. However, if you're referring to a system where the average tax rate falls as GDP rises, that would be characteristic of a regressive tax system. In a regressive tax system, lower-income individuals pay a higher proportion of their income in taxes compared to higher-income individuals, leading to a scenario where, as GDP (and thus income) rises, the average tax rate paid by individuals decreases.