There is little evidence that the Australian economy is currently in the downward sloping section of the Laffer curve.

Question

Quizplus · Accepted Answer

The Laffer curve illustrates the relationship between tax rates and government revenue. When tax rates are too low, government revenue is also low. However, when tax rates are too high, people may not work as much or may engage in tax avoidance strategies, resulting in a decrease in government revenue. The downward sloping section of the Laffer curve represents the point at which higher tax rates result in lower government revenue. There is little evidence that the Australian economy is currently in this section of the curve, as the government's tax revenue has been increasing in recent years despite tax cuts. Therefore, the answer is A.

There Is Little Evidence That the Australian Economy Is Currently