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Q. What is the laffer curve and why is it likely that canada is on the...

Q. What is the laffer curve and why is it likely that canada is on the "wrong" side of it? How can the federal government use discretionary fiscal policy to stimulate the economy?

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The laffer curve shows the relationship between the tax rate and the tax revenue the government is collecting from it, it establishes that beyond a point if the taxes are increases it will lead to a lower revenue. being on the wrong side of the laffer curve means having a higher that optimal tax rate.

to correct this the government of Canada can decrease the tax rate in the economy that will also increase the demand and stimulate the economy.

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