The ___ Curve illustrates the theoretical relationship between rates of taxation and the resulting levels of the government's tax revenue, suggesting an optimal tax rate.
- Laffer
- TRIMs (or Trade-Related Investment Measures)
- John Maynard Keynes
- Nominal
Answer: Laffer
The Laffer Curve posits that increasing tax rates beyond a certain point will actually decrease total tax revenue due to disincentives to work, tax evasion, and capital flight. It is frequently cited in debates regarding supply-side economics and tax cuts.