Which of the following factors would result in a more unequal income distribution ?
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Answer: D. More regressive taxes
Explanation
Regressive taxes take a larger percentage of income from lower-income earners. This tax structure widens income disparities across different population brackets. Consequently, regressive taxation results in a more unequal income distribution. Tax systems are classified as progressive, proportional, or regressive based on incidence. Sales taxes often act regressively because lower-income households spend most income. Income distributions are frequently measured using Gini coefficients and Lorenz curves.
Governments design tax policies to balance revenue needs with income equality goals. Regressive taxes disproportionately burden vulnerable households within developing economies. Tax reform debates often center on reducing reliance on regressive consumption taxes. Increased employment typically narrows income inequalities by providing widespread wages. Unemployment allowances support low-income households, reducing overall income inequality. Progressive taxes tax higher earners at greater rates, narrowing income distributions.
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Answer: A. An increase in the price of BMWs produced in Germany and sold in the Pakistan
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Q5. Which of the countries listed below is not classified as a high-income nation ?
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Answer: D. Mexico
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