economics medium Fill in the Blank

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.

  1. Laffer
  2. TRIMs (or Trade-Related Investment Measures)
  3. John Maynard Keynes
  4. 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.

Topic Public Finance - Curves
Exam Relevance UPSC Prelims, SSC CGL
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