Post Utme Caleb University 2025 Economics Question 18

Practice objective / multiple choice question 18 from the 2025 Post Utme Caleb University Economics examination.

Post Utme Caleb University 2025 Economics Objective / Multiple Choice
Question 18 POST_UTME_CALEB_UNIVERSITY • 2025 • ECONOMICS • objective

The Nigerian government has introduced a new tax policy to increase revenue. The policy includes a 10% tax on all goods and services. However, some critics argue that the policy will lead to a decrease in economic growth because it will increase the \cost of production. U\sing the concept of taxation and economic growth, explain why the critics' argument may be valid.

Answer Options

Correct Answer A. The policy will lead to a decrease in economic growth because the tax will increase the \cost of production, which will lead to a decrease in the supply of goods and services.
B. The policy will lead to a decrease in economic growth because the tax will increase the \cost of production, which will lead to a decrease in the demand for goods and services.
C. The policy will lead to a decrease in economic growth because the tax will increase the \cost of production, which will lead to a decrease in the investment in the economy.
D. The policy will lead to a decrease in economic growth because the tax will increase the \cost of production, which will lead to a decrease in the employment in the economy.
Correct Answer
A
Correct Option:
The policy will lead to a decrease in economic growth because the tax will increase the \cost of production, which will lead to a decrease in the supply of goods and services.

About This Question

This is Post Utme Caleb University 2025 Economics Question 18. It is one of the objective questions from the 2025 Post Utme Caleb University Economics examination.

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