Waec Model Questions Vol1 2025 Economics Question 26
Practice objective / multiple choice question 26 from the 2025 Waec Model Questions Vol1 Economics examination.
The government's tax base is ₦500 million. Currently a flat tax rate of 15 % is applied, generating tax revenue. The government plans to raise the tax rate to 18 % but expects the tax base to shrink because the tax‑base elasticity with respect to the tax rate is -0.4. The initial budget deficit is ₦30 million. What will be the new budget deficit after the tax change?
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About This Question
This is Waec Model Questions Vol1 2025 Economics Question 26. It is one of the objective questions from the 2025 Waec Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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