O-LevelEconomicsGovernment and the macroeconomy2281/12 · Oct/Nov 2016 · Q251 Mark
A government introduces state benefits for the unemployed and increases the top rate of income tax to pay for the benefits. What effect will these changes have on poverty and the tax system?
Apoverty: increase, tax system: make it more progressive
Bpoverty: increase, tax system: make it more regressive
Cpoverty: reduce, tax system: make it more progressive
Dpoverty: reduce, tax system: make it more regressive
✓ Correct answer
C: poverty: reduce, tax system: make it more progressive
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