The Laffer curve is the relationship between
A)government expenditure and potential GDP.
B)the tax rate and potential GDP.
C)tax revenue and potential GDP.
D)the tax rate and the amount of tax revenue.
E)government outlays and revenues.

Question

Quizplus · Accepted Answer

The Laffer curve illustrates the relationship between the tax rate and the amount of tax revenue collected by the government, suggesting that there is an optimal tax rate that maximizes revenue.

The Laffer Curve Is the Relationship Between