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JAMB Economics 2003 Question 33

Question 33

Public Finance

The major objective of a revenue allocation formula in a country is to

  1. A.share revenue between the different tiers of government
  2. B.divert revenue from areas of surplus to areas of need
  3. C.ensures the financial viability of the country
  4. D.share revenue between the public and private factors
Show the answer and explanation

Answer: A (share revenue between the different tiers of government)

Explanation

A revenue allocation formula decides how federally collected revenue is shared among federal, state and local governments.