Which of the following scenarios is consistent with the Laffer curve?
A)The tax rate is 1 percent,and tax revenue is very low.
B)The tax rate is 1 percent,and tax revenue is very high.
C)The tax rate is 99 percent,and tax revenue is very high.
D)The tax rate is moderate (between very high and very low),and tax revenue is very low.

Question

Quizplus · Accepted Answer

At a very low tax rate like 1 percent, tax revenue is expected to be low, which is consistent with the Laffer curve that suggests there is an optimal tax rate that maximizes revenue.

Which of the Following Scenarios Is Consistent with the Laffer