The Laffer curve demonstrates that raising tax rates:
A. increases then decreases tax revenues.
B. always increases tax revenues.
C. always decreases tax revenues.
D. decreases then increases tax revenues.
A. increases then decreases tax revenues.
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What is known as the Dutch disease?
a. The problem that arises when a government cannot meet its foreign debts b. The phenomenon of a boom in one industry causing declines in the rest of the economy c. A sudden and unexpected devaluation of a currency as a consequence of policy controls d. The problem that arises when high imports force an economy to borrow from external sources e. A deficit in the balance of payments of the economy that arises due to a sudden appreciation of the domestic currency.
A normal good is defined as one
a. having a downward-sloping demand curve b. that is neither a luxury nor a basic good c. that is bought by consumers with normal tastes d. whose demand increases when incomes increase e. whose demand decreases when incomes increase
A major capital purchase is any purchase that you can’t afford to pay for in full with monthly cash flow.
Indicate whether the statement is true or false
As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases. B. initially decreases, then increases. C. decreases. D. initially increases, then decreases.