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Percentage of Total Government Revenue from Oil, 1967-1990

\begin{tabular}{|r|r|}
\hline \multicolumn{1}{|c|}{ Year } & Percentage \\
\hline 1967 & [tex]$18.26 \%$[/tex] \\
\hline 1971 & [tex]$25.99 \%$[/tex] \\
\hline 1975 & [tex]$80.81 \%$[/tex] \\
\hline 1979 & [tex]$66.30 \%$[/tex] \\
\hline 1983 & [tex]$67.00 \%$[/tex] \\
\hline 1987 & [tex]$75.80 \%$[/tex] \\
\hline 1990 & [tex]$97.24 \%$[/tex] \\
\hline
\end{tabular}

Based on the chart, what would most likely happen if the demand for oil decreased after 1990?

A. The government would go bankrupt.
B. Government revenue would decline.
C. The government would seek foreign loans.
D. Government revenue would double.



Answer :

GinnyAnswer
To answer the question of what would most likely happen if the demand for oil decreased after 1990, let's analyze the given data and consider the implications of a demand decrease on government revenue.

From the table, we observe the following percentages of total government revenue coming from oil in various years:
- 1967: 18.26%
- 1971: 25.99%
- 1975: 80.81%
- 1979: 66.30%
- 1983: 67.00%
- 1987: 75.80%
- 1990: 97.24%

By 1990, we see that a significant 97.24% of the government's revenue was generated from oil. This indicates that the government's financial health was heavily dependent on oil revenue.

If the demand for oil were to decrease after 1990, the following would happen:

1. Reduction in Oil Revenue: With demand for oil decreasing, the primary source of revenue would diminish sharply. Hence, the substantial portion of income (97.24% in 1990) from oil would decrease.

2. Impact on Total Government Revenue: Since the government's revenue is largely dependent on oil, a decrease in demand for oil implies a significant shortfall in overall revenue.

Considering these points, the most logical and likely outcome would be that government revenue would decline.

This is the correct answer from the given options:
- The government would go bankrupt.
- Government revenue would decline.
- The government would seek foreign loans.
- Government revenue would double.

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