O-LevelEconomicsGovernment and the macroeconomy2281/11 · May/June 2019 · Q161 Mark
A government increases the rate of income tax in order to pay for extra transfer payments, including cash benefits to the poor. What must occur as a result of this?
AIt changes the distribution of income.
BIt ensures the equality of incomes.
CIt leads to more people paying income taxes.
DIt reduces the level of unemployment.
✓ Correct answer
A: It changes the distribution of income.
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