Which of the Following Is an Argument of Arthur Laffer,the

question 53

Multiple Choice

Which of the following is an argument of Arthur Laffer,the supply-side economist?

• A)That present tax rates are too high but a cut in tax rates will lead to a drop in tax revenues.
• B)That present tax rates are too low and should be increased.
• C)That an increase in tax rates will force people to work harder.
• D)That a cut in tax rates will lead to higher tax revenues.

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Definitions:

Significant Influence

The capacity to affect the financial and operating policies of another entity without having control or full ownership, often through ownership of a sizable percentage of voting shares.

Net Income

The net profit figure for a company, achieved by subtracting all operational costs and tax liabilities from its revenue.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on a portion of its profits.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, but not control them, typically associated with ownership of 20-50% of voting stock.