If the tax buoyancy coefficient is exactly equal to 1, it implies that tax revenues are growing at the exact same rate as the nominal Gross Domestic Product (GDP), assuming no discretionary changes in tax rates.

Answer: True

Tax buoyancy measures the automatic responsiveness of the tax system to economic expansion. A buoyancy of 1 means the tax-to-GDP ratio remains perfectly constant over time. A buoyancy greater than 1 indicates a highly progressive and efficient tax system where revenues grow faster than the economy, providing the government with increasing fiscal space without needing to hike tax rates.