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Figure: Laffer Curve (Figure: Laffer Curve)The Graph Shows a Hypothetical

Question 95

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Figure: Laffer Curve Figure: Laffer Curve (Figure: Laffer Curve) The graph shows a hypothetical Laffer curve.If the tax rate is 80%: A) the government should reduce the rate to about 50% to maximize tax revenue. B) the tax rate should be increased to 100% (all income taken in taxes) to maximize tax collection. C) the tax rate is at its optimal level. D) the tax rate should be reduced to zero to maximize tax revenue. (Figure: Laffer Curve) The graph shows a hypothetical Laffer curve.If the tax rate is 80%:


A) the government should reduce the rate to about 50% to maximize tax revenue.
B) the tax rate should be increased to 100% (all income taken in taxes) to maximize tax collection.
C) the tax rate is at its optimal level.
D) the tax rate should be reduced to zero to maximize tax revenue.

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