Topic Questions (MCQ – EASY): Government policies to promote equity – 3auk

What is a benefit of means-tested benefits compared to universal benefits?

an increase in the percentage of eligible individuals receiving benefits

a decrease in the rate at which benefits are reduced as household incomes rise

a decrease in the occurrence of the poverty trap

the focus of benefits on individuals with the highest level of need

What poses a limitation on utilizing income taxes to redistribute income towards poorer segments of society?

the expenses employers incur for tax collection

the tendency of poorer groups to have a higher inclination to save

the observation that both richer and poorer groups have the same inclination to consume

the probability that higher marginal taxes will eventually diminish tax revenue

How can changes in a government's welfare policies that decrease the number of eligible recipients contribute to reducing income inequalities and poverty?

Not all individuals who are eligible for benefits actually claim them.

Some recipients of benefits may misuse the funds they receive.

Individuals who are no longer eligible for benefits will have a stronger motivation to seek employment.

Individuals who lose their benefits will experience a lower tax burden.

What is the main reason for a government to raise the highest rates of tax on personal income?

It anticipates that the policy change will have no impact on total tax revenue.

It is concerned about the possibility of some high-earning individuals emigrating.

It values equity considerations more than efficiency considerations.

It aims to shift the focus of the tax system from direct to indirect taxation.

What measures are most likely to decrease income inequality in an economy?

Additional government regulation in product and factor markets.

Implementation of higher progressive direct taxation and reduced indirect taxation.

Strengthening trade unions' influence and reducing labor market flexibility.

Decreasing welfare benefits and increasing the interest rate.

How can it be determined that a society has achieved a more equal distribution of income?

A faster pace of economic growth.

A higher score on the Human Development Index.

A lower Gini coefficient.

A reduced tax-to-GDP ratio.