50 40 30 20 10 0 20 40 60 80 Tax Rate (%) 100 According to this Laffer curve, should the government increase the tax rate from 4C O a.) Yes, because the tax revenue continues to increase after a tax rate of 4C b.) No, because the government should increase the tax rate to 100%. Oc.) No, because the tax revenue is no longer maximized. O d.) Yes, because the government will receive a higher tax revenue.

50 40 30 20 10 0 20 40 60 80 Tax Rate (%) 100 According to this Laffer curve, should the government increase the tax rate from 4C O a.) Yes, because the tax revenue continues to increase after a tax rate of 4C b.) No, because the government should increase the tax rate to 100%. Oc.) No, because the tax revenue is no longer maximized. O d.) Yes, because the government will receive a higher tax revenue.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter11: Fiscal Policy

Section: Chapter Questions

Problem 1.7P

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