8. The Laffer curveSuppose that the following curve shows tax revenues at various tax rates in a hypothetical economy.TAX REVENUE (Billions of dollars)200O+M++INCOME TAX RATE (Percent)P*N100? Complete the following table by indicating what the government should do in order to maximize tax revenues if it is operating at each of the pointslisted.Point Raise Tax Rates Lower Tax RatesMNOOOKeep Current Tax RatesOO

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Complete the following table by indicating what the government should do in order to maximize tax revenues if it is operating at each of the points listed. Point Raise Tax Rates Lower Tax Rates Keep Current Tax Rates M N O

Complete the following table by indicating what the government should do in order to maximize tax revenues if it is operating at each of the points listed. Point Raise Tax Rates Lower Tax Rates Keep Current Tax Rates M N O

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

100%

8. The Laffer curve
Suppose that the following curve shows tax revenues at various tax rates in a hypothetical economy.
TAX REVENUE (Billions of dollars)
20
0
O
+
M
++
INCOME TAX RATE (Percent)
P
*
N
100
?

Complete the following table by indicating what the government should do in order to maximize tax revenues if it is operating at each of the points
listed.
Point Raise Tax Rates Lower Tax Rates
M
N
O
OO
Keep Current Tax Rates
OO

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