The Laffer Curve

question 206

Multiple Choice

The Laffer curve

• A) initially slopes upward as increasing tax rates lead to increasing tax revenue but eventually will slope downward as increasing tax rates lead to decreasing tax revenue.
• B) slopes downward throughout its range since increasing tax rates will always lead to decreases in tax revenue.
• C) slopes upward throughout its range since increasing tax rates will always lead to increases in tax revenue.
• D) is horizontal because tax revenue is independent of the rate of interest.

---

Definitions:

Promissory Estoppel

A legal principle where a promise is enforceable by law, even if made without formal consideration, when a promisor has made a promise to a promisee who then relies on that promise to his or her detriment.

Legal Enforcement

The act of compelling compliance with the law, often through police or judicial action.

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed by the parties involved to be enforceable.

Subject of Agreement

The specific matter or issue that is being agreed upon or contracted between parties.