The Laffer curve illustrates the concept that
a. an increase in marginal tax rates will always cause tax revenues to increase.
b. an increase in marginal tax rates will always cause tax revenues to decrease.
c. when marginal tax rates are quite high, a decrease in the tax rate may cause tax revenues to increase.
d. when marginal taxes are quite low, an increase in the tax rate will probably cause tax revenues to decline.
C
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Fresh orange juice and frozen orange juice are substitutes in production. The price of fresh orange juice rises. As a result, the equilibrium price of frozen orange juice ________ and the equilibrium quantity ________
A) rises; increases B) rises; decreases C) does not change; decreases D) falls; increases E) falls; decreases
If the dollar appreciates against the Mexican peso
A) U.S. exports to Mexico become less expensive. B) The value of Mexican imports to the United States does not change. C) Mexican imports to the U.S. become more expensive. D) U.S. exports to Mexico become more expensive.