The Laffer Curve Suggests That If Tax Rates Are Very

question 45

Multiple Choice

The Laffer curve suggests that if tax rates are very high, _____ tax rates will _____ tax revenues.

• A) raising; increase
• B) reducing; increase
• C) reducing; decrease
• D) reducing; stabilize

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Definitions:

Type of Business

Categories or classifications of commercial organizations based on factors like ownership, size, and product or service rendered.

Chapter 7

A provision of U.S. bankruptcy law under which an individual or business liquidates assets to pay off debts under the guidance of a court-appointed trustee.

Trustee

Someone legally appointed to manage and administer property or assets for the benefit of another, often used in contexts like bankruptcy, trust funds, and estates.

IRA

An Individual Retirement Account, a financial tool designed to help individuals save for retirement with tax advantages.