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LAFFER CURVE: The graphical inverted-U relation between tax rates and total tax collections by government. Developed by economist Arthur Laffer, the Laffer curve formed a key theoretical foundation for supply-side economics of President Reagan during the 1980s. It is based on the notion that government collects zero revenue if the tax rate is 0% and if the tax rate is 100%. At a 100% tax rate no one has the incentive to work, produce, and earn income, so there is no income to tax. As such, the optimum tax rate, in which government revenue is maximized, lies somewhere between 0% and 100%. This generates a curve shaped like and inverted U, rising from zero to a peak, then falling back to zero. If the economy is operating to the right of the peak, then government revenue can be increased by decreasing the tax rate. This was used to justify supply-side economic policies during the Reagan Administration, especially the Economic Recovery Tax Act of 1981 (Kemp-Roth Act).
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AUTONOMOUS INVESTMENT Business investment expenditures that do not depend on income or production (especially national income or even gross domestic product). That is, changes in income do not generate changes in investment. Autonomous investment is best thought of as investment that the business sector undertakes regardless of the state of the economy. It is measured by the intercept term of the investment line. The alternative to autonomous investment is induced investment, which does depend on income.
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"Use, do not abuse; neither abstinence nor excess ever renders man happy." -- Voltaire, philosopher
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A Careful View Of WORKER SAFETYIt was THE most exciting baseball game in the long rivalry between the Shady Valley Primadonnas and the Oak Town Sludge Puppies. Two out, two on, the bottom of the ninth, the home team down by a run, and Harold "Hair Doo" Dueterman -- the Primadonnas' star center fielder -- up to bat. What excitement. What drama. Unfortunately Hair Doo hit the ball directly at the Primadonnas' runner on first. A line shot to the head. The runner was out. He was also unconscious. Game over. That was not the end to the excitement, though. Chucky Calhoun, the peanut vendor, was inadvertently decked by an enthusiastic fan and suffered a number of injuries as he tumbled down some concrete steps. Chucky, who has made repeated complaints to the Primadonnas owner (D. J. Goodluck) about unsafe working conditions, has filed a workers' compensation claim. What a mess. Too bad Hair Doo just didn't strike out like he usually does.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet looking to buy either a T-shirt commemorating the second moon landing or a coffee cup commemorating Thor Heyerdahl's Pacific crossing aboard the Kon-Tiki. Be on the lookout for the happiest person in the room.
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The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
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APR
Annual Percentage Rate
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