The Laffer curve is the curve showing how tax revenue varies as tax rates vary.

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Quizplus · Accepted Answer

The Laffer curve is indeed the curve that illustrates the relationship between tax rates and tax revenue. It suggests that as tax rates increase, tax revenue will first increase, but eventually reach a point where further increases in tax rates will lead to a decrease in tax revenue. This curve is often used by economists to illustrate the concept of optimal taxation.

The Laffer Curve Is the Curve Showing How Tax Revenue