Q.1 _____ is an effective instrument
with the fiscal authority to
distribute income equally.
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Taxes are an effective instrument with the fiscal authority to distribute income equally.
- Incomes of people is different depending upon the education and location. Some individuals have more wealth than others and wealth distribution is more unequal than that of income is another explanation for income inequality.
- The degree to which improvements in consumer income inequality contribute to a more or less equitable distribution of disposable income depends on the willingness of taxes and transfers to be shared.
- Progressive tax and welfare schemes by the government minimise the disparity by shifting wealth from high to low income families.
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