According to the Laffer Curve, an Increase in the Tax

question 280

Multiple Choice

According to the Laffer curve, an increase in the tax rate will increase tax revenue

• A) if the economy is on the positively sloped section of the curve.
• B) if the economy is on the negatively sloped section of the curve.
• C) if the economy is at the farthest point out on the curve.
• D) no matter the location of the economy on the curve.

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Definitions:

Slope

A measure of the steepness or incline of a line, defined as the ratio of the vertical change to the horizontal change between two points on the line.

Graph

A graphical representation of data, functions, or equations, typically plotted on a coordinate system.

Slope

A measure of the steepness or incline of a line, often represented as the ratio of the change in y over the change in x between two points on the line.

Line

A straight one-dimensional figure having no thickness and extending infinitely in both directions.