Question

Government policies designed to equalize the distribution of economic well-being include (i) the welfare system (ii) unemployment insurance (iii) progressive income tax a. (ii) only b. (i) only c. (i) and (ii) only d. (i), (ii), and (iii)

Answer 1

Answer: d. (i), (ii), and (iii).

The production of goods and services leads to overall growth of the economy. But the economic well being is ensured if the fruits of output are distributed equally. In this regard, government formulates policies that are intended for equal distribution of economic well being. It includes welfare system which in turn includes social security schemes, protection to weaker section of the society, developing infrastructure for education and health even for deprived section of the society. Unemployment insurance is another such policy which provides for subsistence allowance during unemployment period. This also redistributes income. The progressive income tax means richer persons will pay more as tax and this tax amount will be used for welfare purposes ensuring redistribution of output or economic well being.