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Hungry!

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Goodland is currently operating at full capacity. The country experienced a sudden boom in economic activity. However, the unemployment rate increased soon afterwards. What is likely to have caused such a phenomenon?
 
  What will be an ideal response?

Question 2

The Laffer curve illustrates that
 
  A) high tax rates could lead to lower tax revenues if economic activity is severely discouraged.
  B) lowering tax rates will always decrease tax revenues.
  C) lowering tax rates will always increase tax revenues.
  D) high tax rates would increase tax revenue and increase the labor supply as people work harder to maintain their standard of living.


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fraziera112

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