During the Reagan administration, the Laffer curve was used to ague that:
a. the supply-side effects of tax cuts are relatively small.
b. discretionary tax cuts are unwise because they create stagflation.
c. lower income tax rates could increase tax revenues.
d. a flat tax would simplify the tax code and stimulate economic growth.
Question 2
The relationship between inflation and unemployment shown along a Phillips curve is a(n):
a. direct relationship.
b. quadratic relationship.
c. exponential relationship.
d. inverse relationship.
e. parabolic relationship.
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