Question 702008EconomicsWAEC
Which of the following will have a more destabilizing effect on the economy
A
A tax on the prices of vehicles
B
A tax on petrol
C
A decrease in the supply of vehicles
D
Moderate increase in wages
Step-by-Step Explanation
Ans: B___A tax on petrol.
A tax on patrol will have a destabilizing effect on the economy because raw materials and finished goods will become expensive as result of increase in the cost of transportation that resulted from increase in price of patrol.
Ref: Fundamentals of Economics for Senior Secondary Schools by R.A.I Anyanwuocha. 2010 EdItion. Pg 191.