Concept:In national income accounting, tax revenue is treated as a dependent variable that changes with the level of economic activity, mainly income.
Explanation:National income accounting records the total income, output, and expenditure of an economy.
Tax is generally considered a function of income, so as income rises, tax revenue also rises, and as income falls, tax revenue falls.
The tax base and tax rate are usually applied to income earned by individuals and firms.
Therefore, in analysing the circular flow of income, tax is determined by the level of income, not by consumption, investment, or savings alone.
Consumption, investment, and savings influence income, but they are not the direct determinant of tax in national income accounting.
Answer:A. level of income