The Laffer curve illustrates that
A) high tax rates could lead to lower tax revenues if economic activity is severely discouraged.
B) lowering tax rates will always decrease tax revenues.
C) lowering tax rates will always increase tax revenues.
D) high tax rates would increase tax revenue and increase the labor supply as people work harder to maintain their standard of living.
A
Economics
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Which of the following components of government spending and revenue serves as an automatic stabilizer?
a. the wealth effect b. the multiplier c. unemployment insurance d. military spending e. property taxes
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