How do governments use spending and taxation to reduce inequality and poverty in an economy?
What will be an ideal response?
The government uses progressive taxation and transfer payments in order to reduce inequality and poverty in the economy. Transfer payments refer to payments from the government to certain individual groups, such as the elderly or the unemployed. Social security, Medicare, and Supplemental Security Income are all examples of transfer payments. A progressive tax system is one in which marginal tax rates increase as incomes increase, so that the rich face higher marginal tax rates than the less well-to-do.
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A market tends to be monopolistic if
a. The good has too many substitutes b. The good has very few substitutes c. The good has too many complements d. The good has very few complements
If a foreign currency becomes more expensive in United States dollars, we would expect
a. U.S. exports to increase b. U.S. imports to increase c. U.S. exports to remain constant d. U.S. exports to decrease e. the quantity of foreign currency demanded in the United States to rise