The Laffer curve indicates which of the following?
A. There is an ideal tax-revenue-maximizing tax rate for government taxes.
B. There is an ideal interest rate that will maximize investment spending.
C. There is an ideal income tax rate on individuals, depending on their consumption behavior.
D. There is an ideal amount of government spending that will lead to full national employment.
Answer: A
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A firm in a monopolistically competitive market is similar to a monopoly in the sense that (i) they both face downward-sloping demand curves. (ii) they both charge a price that exceeds marginal cost. (iii) free entry and exit determines the long-run equilibrium
a. (i) only b. (ii) only c. (i) and (ii) only d. (i), (ii), and (iii) only