Suppose That Income Tax Revenues Are Maximized at an Average

Multiple Choice

Suppose that income tax revenues are maximized at an average (income) tax rate of 45 percent.If the Laffer curve is a correct diagrammatic representation of the relationship between tax rates and tax revenue,it follows that a tax rate of

A) 35 percent will reduce tax revenues.
B) 48 percent will reduce tax revenues.
C) 48 percent will generate as much tax revenue as a tax rate of 45 percent.
D) 35 percent will generate as much tax revenue as a tax rate of 45 percent.
E) a and b