Question 1
According to the Laffer curve, as tax rates increase, tax revenues
◦ initially increase and then decrease.
◦ decrease continuously.
◦ initially decrease and then increase.
◦ rise continuously.
Question 2
According to the Laffer curve
◦ an increase in tax rates will always increase tax revenues.
◦ a decrease in tax rates will always decrease tax revenues.
◦ a decrease in tax rates will always increases tax revenues.
◦ an increase in tax rates will have an inconsistent effect on tax revenues.