Which of the Following Scenarios Is Consistent with the Laffer

question 135

Multiple Choice

Which of the following scenarios is consistent with the Laffer curve?

• A)An increase in the tax rate always increases tax revenue.
• B)The tax rate is 1 percent, and tax revenue is very high.
• C)The tax rate is 99 percent, and tax revenue is very high.
• D)A decrease in the tax rate always increases tax revenue.

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Definitions:

Implied Warranty

An unstated guarantee that goods sold or services provided meet certain quality standards and fit for the purpose intended.

Breach

A violation or infraction of a law, obligation, tie, or standard.

Secured Interest

A legal claim or lien on collateral that has been pledged, often in relation to loans, to secure payment.

Deposit

A sum of money placed in trust or paid as a first installment on the purchase of something or as a guarantee of the buyer's intent to complete the purchase.