Economics 9708 · AS & A Level · Taxes and subsidies

Taxes and subsidies — practice question

Which changes are most likely to lower income inequality within an economy?

  • Aadditional government regulation of product and factor markets
  • Bincreased progressive direct taxation and decreased indirect taxation
  • Cincreased trade union power and reduced labour market flexibility
  • Dreduced welfare benefits and increased rate of interest

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