Which of the following represents government's redistributive function ?

Progressive income taxation

The correct answer is option (1) : Progressive income taxation

Progressive income taxation involves taxing higher incomes at a proportionately higher rate, which is a mechanism for wealth redistribution. This is a direct method through which the government aims to reduce inequality by taking a larger share of income from those with higher earnings.

The other options do not represent the redistributive function of the government:

• Contraction of money supply in an economy: This is a monetary policy aimed at controlling inflation and stabilizing the economy, not a redistributive policy.
• Expansion of money supply in an economy: This is also a monetary policy aimed at stimulating economic activity, not directly related to redistribution.
• Increase in spending of private economic agents: This refers to the actions of private individuals or businesses and does not pertain to government policy aimed at redistribution.