When a Country Is on the Downward-Sloping Side of the Laffer

question 69

Multiple Choice

When a country is on the downward-sloping side of the Laffer curve,what will cutting tax rates do

• A)lower tax revenues and increase deadweight loss
• B)lower both tax revenues and deadweight loss
• C)increase tax revenues and decrease deadweight loss
• D)increase both tax revenues and deadweight loss

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Definitions:

Expectancy Theory

A psychological theory that explains motivational forces by weighing the perceived values of outcomes against the perceived likelihoods of achieving them.

Low Self-efficacy

The belief in one's inability to achieve goals or handle situations effectively.

Reiss Profile

A psychological tool that identifies the underlying motivations and needs of individuals to help explain why people behave the way they do.

Basic Desires

Fundamental motivations or drives that influence human behavior and decision-making.