Laffer curve Office has estimated that extending the Bush tax cuts of 2001–2003 beyond their 2010 expiration would increase deficits by $1.8 trillion over the following decade. Economist Paul Krugman contended that supply-side adherents did not fully believe that the United States income tax rate was on the "backwards-sloping" side of the curve and yet they still advocated lowering taxes to encourage investment of personal savings. Supply-side economics indicates that the simple descriptions of the Laffer curve are usually intended for pedagogical purposes only and do not represent the complex economic responses to tax policy which may be observed from such viewpoints
Yerkes–Dodson law Yerkes–Dodson law The Yerkes–Dodson law is an empirical relationship between arousal and performance, originally developed by psychologists Robert M. Yerkes and John Dillingham Dodson in 1908. The law dictates that performance increases with physiological or mental arousal, but only up to a point. When levels of arousal become too high, performance decreases. The process is often illustrated graphically as a bell-shaped curve which increases and then decreases with higher levels of arousal. Research has found that different tasks require different levels of arousal for optimal performance. For example, difficult or intellectually demanding tasks may require a lower level of arousal