Exhibit 11-2

-Refer to Exhibit 11-2.At point B,if we cut tax rates slightly,tax revenues

Question

Exhibit 11-2
 
-Refer to Exhibit 11-2.At point B,if we cut tax rates slightly,tax revenues

Quizplus · Accepted Answer

At point B, the tax rate is on the right side of the curve's peak, meaning that cutting tax rates slightly would increase tax revenues. This is due to the "Laffer curve" concept, which suggests that at a certain point, increasing tax rates starts to decrease tax revenues as people become less willing or able to pay. Cutting taxes can stimulate economic activity and increase tax revenues in certain situations.

Exhibit 11-2 -Refer to Exhibit 11-2.At Point B,if We Cut Tax Rates