The Decreasing Part of the Laffer Curve Supports the View

question 8

Multiple Choice

The decreasing part of the Laffer curve supports the view of proponents of:

• A)lower public spending
• B)unchanged public spending
• C)higher public spending
• D)none of the above.

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Definitions:

Savings

Money set aside from personal income for future use, often placed in secure accounts or investments for growth or as a safeguard.

Disposable Income

Funds households are left with for saving or expenditure after income taxes are taken out.

APC (Average Propensity to Consume)

The fraction of income that is spent on consumption as opposed to savings.

Disposable Income

The amount of money available to households for making purchases and savings after the removal of income taxes.