Multiple choice

A redistribution of income in a country can be best brought about through

  1. progressive taxation combined with progressive expenditure

  2. progressive taxation combined with regressive expenditure

  3. regressive taxation combined with regressive expenditure

  4. regressive taxation combined with progressive expenditure
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Progressive taxation is a process in which, when the income of a person increases, rate of income tax on the income also goes up. Regressive taxation is the process according to which, when the income of a person goes up, rate of tax goes down. A progressive tax structure improves the distribution of income.

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