The Laffer curve reflects the view that when
A. tax rates are too low, raising them creates a greater incentive for suppliers to increase production.
B. tax rates are too high, lowering them not only creates greater incentive for suppliers to increase production, but also ends up generating higher tax revenues.
C. tax revenue is too low, the only way to increase it is through higher tax rates.
D. tax rates are too high, lowering them also reduces tax revenue.
Answer: B
You might also like to view...
Since 1981, the
A) real wage rate increased steadily. B) nominal wage rate increased and the real wage rate did not change by very much. C) real wage rate increased more than the nominal wage rate. D) nominal wage rate increased at an uneven pace whereas the increase in the real wage rate was steady and constant. E) nominal wage rate and real wage rate both decreased.
Refer to the Article Summary. Implementing a negative interest rate policy, as was advocated by the president of the Federal Reserve Bank of Minneapolis, would be designed to ________ the price level and ________ real GDP
A) increase; decrease B) increase; increase C) decrease; decrease D) decrease; increase
A "capitalist" is someone who:
A. owns stock. B. holds a treasury bond. C. opens a retirement account. D. All of these statements are true.
According to the law of supply:
a. producers are willing to supply larger amounts of a good as its price increases. b. a direct relationship exists between the price of a good and the amount buyers choose to buy. c. an inverse relationship exists between the price of a good and the amount buyers wish to buy. d. an inverse relationship exists between the price of a good and the amount producers supply.