The Laffer Curve Illustrates the Concept That

Multiple Choice

The Laffer curve illustrates the concept that

A) an increase in marginal tax rates will always cause tax revenues to increase.
B) an increase in marginal tax rates will always cause tax revenues to decrease.
C) when marginal tax rates are quite high, a decrease in the tax rate may cause tax revenues to increase.
D) when marginal taxes are quite low, an increase in the tax rate will probably cause tax revenues to decline.