Post Utme Abu 2017 Economics Question 19

Practice objective / multiple choice question 19 from the 2017 Post Utme Abu Economics examination.

Post Utme Abu 2017 Economics Objective / Multiple Choice
Question 19 POST_UTME_ABU • 2017 • ECONOMICS • objective

The government of Nigeria has introduced a new tax policy to increase revenue. The policy includes a 10% increase in the value-added tax (VAT) rate. Assuming that the demand for goods is inelastic, what is the likely effect of the tax increase on the quantity of goods sold?

Answer Options

Correct Answer A. The quantity of goods sold will decrease by 10%.
B. The quantity of goods sold will decrease by 20%.
C. The quantity of goods sold will increase by 10%.
D. The quantity of goods sold will increase by 20%.
Correct Answer
A
Correct Option:
The quantity of goods sold will decrease by 10%.

About This Question

This is Post Utme Abu 2017 Economics Question 19. It is one of the objective questions from the 2017 Post Utme Abu Economics examination.

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