Multiple choice

Which of the following policies restricts the concentration of wealth in fewer hands?

  1. Policy of deficit financing

  2. Policy of regressive taxation

  3. Policy of non-developmental expenses

  4. Imposing higher taxes on luxury items
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

It restricts the concentration of wealth in fewer hands. When high tax is imposed on luxury items (which are purchased mainly by the rich), it restricts the concentration of wealth in fewer hands. As the rich can easily pay the higher tax, the revenue is taken from the pockets of the rich and is used for the welfare of the poor.

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