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    Question

    The tax on a commodity is reduced by 20% and its

    consumption is increased by 15%. What is the effect on tax revenue?
    A It increases by 10% Correct Answer Incorrect Answer
    B It decreases by 8% Correct Answer Incorrect Answer
    C It increases by 8% Correct Answer Incorrect Answer
    D No change Correct Answer Incorrect Answer

    Solution

    The correct answer is B

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