The Laffer curve is the relationship between
A) government purchases and potential GDP.
B) tax rates and potential GDP.
C) tax revenue and potential GDP.
D) tax rates and tax revenue.

Question

Quizplus · Accepted Answer

The Laffer curve illustrates the relationship between tax rates and the amount of tax revenue collected by governments. It suggests that there is an optimal tax rate that maximizes revenue without discouraging economic activity.

The Laffer Curve Is the Relationship Between