ECONOMICS
INCOME DISTRIBUTION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Removal of the unemployment benefits
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Free provision of health services
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Higher rates of income tax
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Investment in job training
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Subsidies for child care
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Detailed explanation-1: -Redistribution. Redistributive policies can curb labor income inequalities. Direct taxes and transfers jointly reduce income inequality by more than one-third in advanced economies. However, in emerging market economies the extent of redistribution is much smaller.
Detailed explanation-2: -Governments can intervene to promote equity, and reduce inequality and poverty, through the tax and benefits system. This means employing a progressive tax and benefits system which takes proportionately more tax from those on higher levels of income, and redistributes welfare benefits to those on lower incomes.
Detailed explanation-3: -Various schemes such as Mahatma Gandhi National Rural Employment Guarantee Act Scheme (MGNREGA), Prime Minister’s Employment Generation Programme (PMEGP), Pradhan Mantri Rojgar Protsahan Yojana, Pt.
Detailed explanation-4: -A government budget can help to reduce inequalities in income through redistribution of income and wealth in the economy. To achieve this objective government uses fiscal instruments of taxation and subsidies.