Which type of revenue is concerned with taxes based on consumption or earnings?

The correct answer focuses on how governments collect revenue that is directly linked to the economic activities of individuals and businesses. Derived tax revenue pertains specifically to taxes like sales taxes and income taxes that are based on consumption patterns or the earnings of individuals and corporations.

This type of revenue is generated as a direct result of economic transactions; for example, when a consumer purchases goods, the sales tax collected reflects a portion of the consumption itself. Similarly, income tax is derived from the earnings of individuals, where the amount owed is calculated based on the income level.

In contrast, imposed nonexchange revenue relates to funds that the government imposes on entities without a direct exchange for goods or services, such as regulatory fees. Government-mandated nonexchange transactions involve situations where a government requires resources or services without a direct quid pro quo, such as certain grants or funding programs. Voluntary nonexchange transactions are contributions made voluntarily by individuals or entities, like donations, where there is no expectation of direct benefit in return.

Thus, derived tax revenue stands out as the type of revenue that is specifically tied to consumption or earnings, emphasizing its role in the taxation landscape.