The Laffer curve shows that increasing _______ increases _______ when _______ low.

Question

Quizplus · Accepted Answer

The Laffer curve shows the relationship between tax rates and tax revenue. It suggests that increasing the tax rate can increase tax revenue but only up to a certain point, after which further increases in the tax rate actually lead to a decrease in tax revenue. This is because as tax rates get too high, they disincentivize people from working and investing, which ultimately leads to a decrease in economic activity and tax revenue. Therefore, increasing the tax rate increases tax revenue when the tax rate is low, but beyond a certain point, further increases in the tax rate will actually decrease tax revenue.

The Laffer Curve Shows That Increasing _______ Increases _______ When

The Laffer Curve Shows That Increasing _ Increases _ When