The Laffer Curve Has Been Criticized by Mainstream Economists Because

question 7

Multiple Choice

The Laffer Curve has been criticized by mainstream economists because

• A)tax cuts are just spent, not saved as predicted by the theory.
• B)empirically, tax cuts have not led to higher tax revenues.
• C)there is no theoretical possibility of higher tax rates leading to lower tax revenues.
• D)savers look only at real interest rates, not nominal interest rates.
• E)higher tax rates do not create negative incentive effects.