Refer to the information provided in Figure 18.3 below to answer the questions that follow.
Figure 18.3
-Refer to Figure 18.3.A cut in tax rates will decrease tax revenue if the economy moves from Point
A)A to B.
B)B to A.
C)C to B.
D)A to D.

Question

Refer to the information provided in Figure 18.3 below to answer the questions that follow.
  Figure 18.3
-Refer to Figure 18.3.A cut in tax rates will decrease tax revenue if the economy moves from Point
A)A to B. 
B)B to A. 
C)C to B. 
D)A to D.

Quizplus · Accepted Answer

A cut in tax rates will decrease tax revenue if the economy moves from Point B to A, as this indicates moving to a point on the Laffer curve where tax rates are too low to maximize revenue.

Refer to the Information Provided in Figure 18