InterviewSolution
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InterviewSolution
| 1. |
Explain how can governmentbudget be helpful in reducinginequalities in incomes. |
| Answer» Solution :Governmentcan achieve objective by imposinghigher RATE of tax on income of the rich and on GOODS and services CONSUMED by the rich. This will REDUCE disposableincome of the rich. Themoney so collected can be spent on poor byreducing tax on income and on providingsubsidizedor free goods and servicesto the poor. This will RAISE disposable incomeof the poor. In this way the extent of inequalitybetween rich and the poor can be reduced. | |