Refer to Figure 4-11. On the Laffer curve shown, tax revenue could be increased by

A) decreasing the marginal tax rates if we were currently at point A.
B) decreasing the marginal tax rates if we were currently at point C.
C) increasing the marginal tax rates if we were currently at point B.
D) increasing the marginal tax rates if we were currently at point C.

Marginal Tax Rates

The rate at which an additional dollar of income is taxed, showing the percentage of tax applied to your income for each tax bracket you pass through.

Laffer Curve

A theoretical representation of the relationship between tax rates and government revenue, suggesting there is an optimal tax rate that maximizes revenue.

Tax Revenue

The financial earnings that governments obtain through taxation.