Which factor would lead to a greater disparity in income distribution?

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

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Higher levels of employmentLarger unemployment benefitsImplementation of more progressive taxationAdoption of more regressive tax policiesNone of the above

Explanation

Increasing regressive taxes tends to widen income inequality because such taxes take a larger percentage from lower-income earners compared to higher-income individuals. In contrast, higher employment, increased unemployment benefits, and progressive taxes generally help reduce income inequality.

Practice related questions from the same subject.

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

Which factor would lead to a greater disparity in income distribution?

Explanation

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