The curve which explains relationship between tax rate and tax revenue is called
A)laffer curve
B)kuznets curve
C)lorenz curve
D)none of these

Question

Quizplus · Accepted Answer

The Laffer Curve illustrates the concept of taxable income elasticity—i.e., taxable income will change in response to changes in the rate of taxation. It suggests that there is an optimal tax rate that maximizes revenue without discouraging economic activity.

The Curve Which Explains Relationship Between Tax Rate and Tax