The Laffer Curve Indicates That

question 253

Multiple Choice

The Laffer curve indicates that

• A) when tax rates are low, a decrease in tax rates is likely to increase tax revenues.
• B) when tax rates are high, an increase in tax rates is likely to a decrease in tax revenues.
• C) tax revenue will always increase when tax rates are increased.
• D) tax revenue will always decrease when tax rates are lowered.

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Definitions:

Heat

The form of energy that is transferred between systems or objects with different temperatures, flowing from high to low.

Cold

A viral infectious disease of the upper respiratory system, characterized by a running nose, sore throat, cough, and sneezing.

Conifers

A class of cone-bearing seed plants, mostly evergreens, that includes pines, spruces, and firs, characterized by needles or scale-like leaves.

Spruce

A type of evergreen coniferous tree belonging to the genus Picea, known for its needle-like leaves and wood used in various applications.