The Laffer curve shows the relationship between tax:
A) revenue and tax rates.
B) revenue and take-home pay.
C) revenue and government spending.
D) rates and take-home pay.
E) rates and government spending.

Question

Quizplus · Accepted Answer

The Laffer curve shows the relationship between tax revenue and tax rates. It illustrates that at a certain point, increasing tax rates beyond a certain level will lead to a decrease in revenue, as people and businesses will have less incentive to work and invest.

The Laffer Curve Shows the Relationship Between Tax