Post Utme Aaua 2025 Economics Question 7

Practice objective / multiple choice question 7 from the 2025 Post Utme Aaua Economics examination.

Post Utme Aaua 2025 Economics Objective / Multiple Choice
Question 7 POST_UTME_AAUA • 2025 • ECONOMICS • objective

A government is considering implementing a new tax on luxury goods to reduce income inequality. The tax rate is set at 20% of the good's price, and the government expects the tax revenue to be ₦10 billion. If the tax is implemented, the government also plans to reduce the income tax rate by 5%. U\sing the Laffer Curve, determine the impact of the tax on the government's revenue.

Answer Options

A. The tax will increase the government's revenue by 10%.
B. The tax will decrease the government's revenue by 5%.
Correct Answer C. The tax will have no impact on the government's revenue.
D. The tax will increase the government's revenue by 20%.
Correct Answer
C
Correct Option:
The tax will have no impact on the government's revenue.

About This Question

This is Post Utme Aaua 2025 Economics Question 7. It is one of the objective questions from the 2025 Post Utme Aaua Economics examination.

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