The Laffer Curve Shows That Increasing ________ Increases ________ When

question 35

Multiple Choice

The Laffer curve shows that increasing ________ increases ________ when ________ low.

• A)tax rates; tax revenue; tax rates are
• B)tax revenue; potential GDP; tax revenue is
• C)potential GDP; tax revenue; tax revenue is
• D)None of the above answers is correct.

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Definitions:

Governmental Direction

Guidance or regulation provided by government bodies to influence or control certain activities, industries, or economic policies.

Roundabout Production

An economic concept that refers to more capital-intensive and indirect methods of production, which, although initially more time-consuming and costly, lead to greater efficiencies and outputs in the long run.

Capital Goods

Capital goods are physical assets that a business uses in the production process to manufacture products and services that consumers will later use.

Consumer Desire

The want for goods, services, or experiences that can provide satisfaction or utility to the consumer.