APPSC Group 2 Mains 2019 Paper 3 · Question 45

Question 45 of the APPSC Group-II Mains 2019 Paper III (30 August 2019). Try it first, then open the answer and explanation.

1. Mains 2019 · P-III · Q45 · Economy (India & AP) · Public Finance & Taxation

   The Laffer effect implies that

   లాఫర్ ప్రభావం (Laffer effect) వర్తించునది

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   Answer: A reduction in the rate of taxation leads to a more than proportionate increase in tax yield

   సమాధానం: పన్నురేట్ల తగ్గింపు ఫలితంగా అధిక అనుపాతంలో పన్ను రాబడి పెరుగుదల

   The Laffer curve suggests that beyond a point, higher tax rates reduce revenue, so cutting rates can raise collections.

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