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aleksklad [387]
4 years ago
12

During the Reagan administration, the Laffer curve was used to argue that: a. lower income tax rates could increase tax revenues

. b. the supply-side effects of tax cuts are relatively small. c. a "flat tax" would simplify the tax code and stimulate economic growth. d. discretionary tax cuts are unwise because they create stagflation.
Business
1 answer:
solniwko [45]4 years ago
6 0

Answer:

A) lower income tax rates could increase tax revenues.

Explanation:

The laffer curve is a theoretical model which argues that there a tax rate that theoretically produces the most revenue for the government. Said tax rate is between 0% and 100%.

President Reagan used this model to argue that a lower tax rate would actually increase government revenue. The logic behind this claim was that lower tax rates increases both public and private saving, which in turn increases investment, resulting in more economic growth, and more taxable income.

The validity of these claims is dispute and is subject to debate among economists.

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In the field of economics, the additional cost associated with one more unit of something is called a(n)?
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In the field of economics, the additional cost associated with one more unit of something is called a(n) marginal cost.

This is further explained below.

<h3>What is marginal cost.?</h3>

Generally, The change in the overall cost that occurs as a result of an increase in the amount produced is referred to as the marginal cost.

This is also referred to as the cost of producing an extra quantity.

In conclusion, In the study of economics, the term "marginal cost" refers to the extra expense incurred by producing one more unit of a certain product or service.

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