Laffer curve and etc...

supply shock-rapid and significant increase in resources, Which causes the SRAS to shift resulting in a shift of the SRPC curve

• Could lead to stagflation-simultaneous increase in inflation and unemployment.

Disinflation-reduction in inflation from year to year which can be seen in the LRPC.

supply Side Economics and Reaganomics - tends to believe that the AS curve will determine level of inflation, unemployment, and economic growth.

• To increase economy - AS shifts -->.
• Companies benefit - AS.
• Consumers benefit - AD.
•  marginal tax rate - amount of tax paid on additional dollar of income.
• By reducing the marginal tax rate, it will encourage more people to work longer.High 

Laffer Curve 

• Tax Rates and Government Revenue have an inverse or a trade off relationship.
• High tax rate = Low government revenue.
• There is a U-shaped, because it always tries to maximizes government revenue.
• As tax rate increase from 0, tax revenue increases from 0 to some maximum number then they decline.

3 Criticisms of the Laffer Curve

• Where the economy is located on the curve is difficult to determine.
• Tax cuts also increase demand, which can fuel inflation and demand may exceed supply.
• Research state that tax rate impact people's incentive to