Q1. The Laffer curve begins at: A) zero tax revenues and ends at zero tax revenues. B) minimum tax revenues and ends at maximum theoretical tax revenues. C) zero tax revenues and ends at maximum theoretical tax revenues.
Q2. The idea behind the Laffer curve is that increases in tax rates do not increase tax revenues proportionately because they decrease the: A) demand for labor. B) supply of labor. C) productivity of labor.
Q3. The Laffer curve indicates that: A) an increase in income tax rates may not increase tax revenue. B) an increase in income tax rates will increase tax revenue. C) a decrease in sales tax rates could increase tax revenue.
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