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JAMB Economics 1990 Question 36

Question 36

Public Finance

Use the figure (tax rate against income, curves X, Y and Z). The relationship between tax rate and income which is relevant to proportional tax is depicted by

Diagram for this question
  1. A.curves Z and Y
  2. B.curve X
  3. C.curve Z
  4. D.curve Y
Show the answer and explanation

Answer: C (curve Z)

Explanation

A proportional tax charges the same rate at every income, so it is the horizontal line Z.