Redistribution function of Government Budget
A. Budget Proposal
B. More tax on Progressive taxation
C. Government plan to redistribute
D. Bring the fair society
E. Government Expenditure on Public Goods
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The total national income of the country goes to either the private sector, that is, firms and households (known as private income) or the government (known as public income). Out of private income, what finally reaches the households is known as personal income and the amount that can be spent is the personal disposable income. The government sector affects the personal disposable income of households by making transfers and collecting taxes. It is through this that the government can change the distribution of income and bring about a distribution that is considered ‘fair’ by society. This is the redistribution function.
The correct order for the Redistribution function of Government Budget is: C, A, B, E, D
Explanation:
- C. Government plan to redistribute: The primary purpose of the redistribution function is to implement plans to redistribute income and wealth.
- A. Budget Proposal: The government proposes budgetary measures to achieve its redistribution objectives.
- B. More tax on Progressive taxation: Implementing progressive taxation, where higher-income individuals pay a higher percentage of their income in taxes, is one way to achieve redistribution.
- E. Government Expenditure on Public Goods: Government expenditure on public goods, social welfare programs, and services also contributes to redistribution.
- D. Bring the fair society: The ultimate goal is often to create a fairer society through the redistribution of resources.