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Basic of Economicseconomics-mcqs › basic-of-economics
Published
26 May 2019
Last updated
28 May 2026

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Which factor is most effective in promoting a fairer income distribution?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

Choose the correct answer

Explanation

Increasing progressive taxation (option C) helps reduce income inequality by imposing higher tax rates on those with greater earnings, thereby redistributing wealth more fairly. In contrast, raising indirect taxes or managers' salaries tends to widen income gaps, and inflation does not directly lead to a more equitable income distribution.

Practice related questions from the same subject.

  1. 1.Which of the following best describes deflation?
  2. 2.Under what condition can two nations benefit from engaging in international trade?
  3. 3.Which of the following represents a legitimate form of currency?
  4. 4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
  5. 5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

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