The Laffer curve illustrates that
A) high tax rates could lead to lower tax revenues if economic activity is severely discouraged.
B) lowering tax rates will always decrease tax revenues.
C) lowering tax rates will always increase tax revenues.
D) high tax rates would increase tax revenue and increase the labor supply as people work harder to maintain their standard of living.
A
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Refer to Table 18-6. Sasha is a single taxpayer with an income of $60,000. What is his marginal tax rate and what is his average tax rate?
A) marginal tax rate = 17%; average tax rate = 21% B) marginal tax rate = 23%; average tax rate = 38% C) marginal tax rate = 38%; average tax rate = 23% D) marginal tax rate = 38%; average tax rate = 24%
Scarce government resources in developing countries would be best spent on
a. circulating basic health information b. modern medical equipment c. medical schools d. health care insurance e. none of the above
If textbooks and study guides are complements, then an increase in the price of textbooks will result in
a. more textbooks being sold. b. more study guides being sold. c. fewer study guides being sold. d. no difference in the quantity sold of either good.
The nominal rate of interest is
A) the same as the price level. B) the real rate of interest minus the previous year's change in the price level. C) the interest rate actually paid by the borrower. D) lower than the real rate in a period of inflation.