Which of the following is correct regarding tax revenues?

Question

Quizplus · Accepted Answer

Tax revenues are largely dependent on the level of economic activity in the country. During economic slowdowns, people earn less and spend less, which leads to a decrease in tax revenues. Conversely, during periods of economic growth, tax revenues tend to increase. Therefore, option D is the correct statement. The other options are not correct – tax revenues do change with changes in tax rates (option B), tax revenues are not the only revenue source in the government's budget (option C), and tax revenues do not increase during recessions (option A).

Which of the Following Is Correct Regarding Tax Revenues