(Figure: Laffer Curve) the Graph Shows a Hypothetical Laffer Curve

question 301

Multiple Choice

(Figure: Laffer Curve) The graph shows a hypothetical Laffer curve. If the tax rate is 80%, the

• A) government should reduce the rate to 50% to maximize tax revenue.
• B) tax rate should be increased to 100% to maximize tax revenues.
• C) tax rate is at its optimal level.
• D) tax rate should be reduced to zero to maximize tax revenue.