The Laffer Curve Makes the Point That Cutting a Very

question 100

Multiple Choice

The Laffer curve makes the point that cutting a very high marginal tax rate can __________ the tax base enough so that tax revenues __________.

• A) lower; rise
• B) lower; fall
• C) raise; rise
• D) raise; fall

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Definitions:

Operating Profit

The profit earned from a firm's core business operations, excluding deductions of interest and tax, also known as operating income or operational profit.

Unit-Priced Sales

Sales transactions where the price is based on a standard unit of measure, such as per item, per pound, or per liter.

Selling Music

The process of exchanging musical compositions or recordings for money or equivalent value.

Cost of Goods Sold

The explicit costs related to manufacturing goods that a company sells, including both materials and labor.