Current Question

Economy Curves :

Laffer Curve

Consider the following statements about ‘Laffer Curve’:

  1. Its nature is hyperbolic when plotted between total revenue (Y-axis) & tax rate (X-axis).
  2. If tax rate is lower than the optimal value. Increasing the tax rate will lead to less revenue.
  3. The slope of the curve is positive in the region of tax rate more than the optimal value.

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Phillip’s Curve

Phillip’s Curve can be used in which of the following?

  1. To plan monetary policy
  2. Central bank to keep eye on inflation
  3. Help the government to access the situation of unemployment in the country

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Phillip’s Curve

Consider the following statements with respect to the Phillip’s Curve:

  1. It represents inverse relationship between inflation rate and unemployment rate.
  2. It says that high levels of employment can be achieved only at high levels of inflation.

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