The Laffer Curve Shows That Increasing ________ Increases ________ When

question 253

Multiple Choice

The Laffer curve shows that increasing ________ increases ________ when ________ low.

• A) tax revenue; potential GDP; tax revenue is
• B) tax rates; tax revenue; tax rates are
• C) potential GDP; tax revenue; tax revenue is
• D) None of the above answers is correct.

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Definitions:

Government Spending

Expenditures by government bodies on goods, services, and public projects to fulfill its various functions and responsibilities.

Trade Deficit

The circumstance where a country's expenditures on imported goods and services exceed the income from its exports, creating a negative trade balance.

Merchandise

Items available for sale in stores or online.

Services

Intangible products provided to consumers, such as healthcare, education, and banking, which do not result in ownership of physical goods.