I came across this problem in the Schweser QBank (FRA section) and I’m having trouble comprehending the fundamental logic behind the answer. The questions is as follows:

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Can someone please explain to me how it is possible to answer this question with out knowing the scale of the revenue in the various questions. I don’t understand how one can possibly know if the effective tax rate will increase or decrease without any kind of weighting on the revenues.

As always, any help is greatly appreciated!