Answer-According to the Laffer curve, a cut in tax rates

Q: Answer-According to the Laffer curve, a cut in tax rates

Laffer Curve is an inverted-U shaped graph. A cut in tax rates will decrease tax revenues if the economy is on the positively sloped portion of the Laffer curve, and increase tax revenues if the economy is on the negatively sloped portion of the Laffer curve

Question

According to the Laffer curve, a cut in tax rates

A will always increase tax revenue

B will always decrease tax revenues

C will increase tax revenues if the economy is on the positively sloped portion of the Laffer curve, and reduce tax revenues if the economy is on the negatively sloped portion of the Laffer curve

D will decrease tax revenues if the economy is on the positively sloped portion of the Laffer curve, and increase tax revenues if the economy is on the negatively sloped portion of the Laffer curve

Practice Next

More International Trade Questions

Identify the first Indian author to win the Andersen Award, celebrated for their contributions to children's literature.
Who wrote “Era of Darkenss” book?
Who is the author of the book “It’s a Wonderful Life: Roads to Happiness”?
RBI Monetary Policy Committee (MPC) decided to hike the repo rate by how much basis points?
Recently which of the following E-commerce company have been granted approval to operate 24/7 in the national capital?
Who is the author of the book "Cracking The Code: My Journey In Bollywood"?
Recently IRDAI has organized it’s first hackathon— Bima Manthan 2022 — with the theme of this hackathon?
Consider the Following statements:

I. Recently the Cabinet has approved an Agreement between India and the United Nations on a ‘Way Finding A...
Who is the author of the book “India vs UK: The Story of an Unprecedented Diplomatic Win”?
Who authored the renowned play "Hamlet"?

According to the Laffer curve, a cut in tax rates

Solution