The Laffer curve suggests which of the following? a. the optimal tax rate on labor income is 0% b. an increase in tax rates leads to an increase in labor supply. c. there is some maximum amount of tax revenue that the government can collect from taxing income. d. the optimal tax rate leads to the highest amount of tax revenue.

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Laffer Curve Analysis

In terms of economics, the Laffer curve was popular among those economists who were or who belonged to the supply side of the economic peripheral.  This concept was popularized by the famous supply-side economist known as Arthur Laffer. This curve illustrated the relationship between the tax rates and government revenue. It is already known that the tax which the public or individuals residing in an economy bear is the revenue or income of the government with the help of which the government does all the necessary works in the society, which is beneficial for the economy.