According to the Laffer Curve

question 122

Multiple Choice

According to the Laffer curve,

• A) an increase in tax rates will always increase tax revenues.
• B) a decrease in tax rates will always decrease tax revenues.
• C) a decrease in tax rates will always increases tax revenues.
• D) an increase in tax rates will have an inconsistent effect on tax revenues.

---

Definitions:

Payoff

The return or reward received by a participant in a game or transaction, often evaluated in terms of utility or financial gain.

Swerve

To change direction suddenly, often to avoid a collision or an obstacle.

Mixed Strategies

In game theory, a strategy that allows for the randomization of choices among different options to achieve a certain outcome.

Pure Strategies

In game theory, a pure strategy is an action chosen by a player where they select a specific move to follow in every possible situation within a game.