The Laffer curve demonstrates that: policymakers will always reduce tax revenues by raising tax rates. policymakers can always increase tax revenues by raising tax rates. none of the other answers are correct above some point on the tax rate scale, lowering tax rates increases tax revenues. if tax rates are 100%, there will be large tax revenues.

The Laffer Curve theory was developed by the economist Arthur Laffer and it shows the relationship…

Answered: The Laffer curve demonstrates that:…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The Laffer curve demonstrates that:

	policymakers will always reduce tax revenues by raising tax rates.
	policymakers can always increase tax revenues by raising tax rates.
	none of the other answers are correct
	above some point on the tax rate scale, lowering tax rates increases tax revenues.
	if tax rates are 100%, there will be large tax revenues.

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