Post Utme Delsu 2022 Economics Question 6

Practice objective / multiple choice question 6 from the 2022 Post Utme Delsu Economics examination.

Post Utme Delsu 2022 Economics Objective / Multiple Choice
Question 6 POST_UTME_DELSU • 2022 • ECONOMICS • objective

The government of a country has decided to implement a policy of reducing the income tax rate from 25% to 20% to boost economic growth. However, the reduction in tax rate will lead to a decrease in government revenue. U\sing the concept of opportunity \cost, explain why the government's decision to reduce the income tax rate is a good idea.

Answer Options

A. The reduction in tax rate will lead to an increase in consumer sp\ending, which will boost economic growth.
Correct Answer B. The reduction in tax rate will lead to a decrease in government revenue, which will reduce the opportunity \cost of the policy.
C. The reduction in tax rate will lead to an increase in investment, which will boost economic growth.
D. The reduction in tax rate will lead to a decrease in economic growth, which will increase the opportunity \cost of the policy.
Correct Answer
B
Correct Option:
The reduction in tax rate will lead to a decrease in government revenue, which will reduce the opportunity \cost of the policy.

About This Question

This is Post Utme Delsu 2022 Economics Question 6. It is one of the objective questions from the 2022 Post Utme Delsu Economics examination.

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