Which of the following would cause income to become more unequal ?
Correct answer: D. More regressive taxes
- A. Increased employment
- B. Increased unemployment allowance
- C. More progressive taxes
- D. More regressive taxes
Explanation
Regressive taxes take a larger proportion of income from low-income groups than from high-income groups, widening income disparities. Progressive taxes and unemployment support generally reduce inequality, while increased employment often raises incomes.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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