18 Questions
Which concept refers to the idea that individuals in similar economic situations should be treated equally by the government?
Horizontal equity
What is a potential consequence of high tax rates on the wealthy according to the text?
Negative impact on economic output
How does the text suggest governments can achieve greater equity through taxation?
Imposing high tax rates on the rich
What conflict arises when governments emphasize redistribution to achieve equity?
Conflict between consumer choices and producer choices
What term is used to describe the efficiency costs associated with government redistribution policies?
Deadweight losses
How can an optimal budgetary policy address the conflict between efficiency and equity?
By striking an appropriate trade-off between efficiency and equity
What is the main objective of redistribution policies?
To ensure horizontal equity and fairness
Which of the following is NOT a cause of market failures mentioned in the text?
Perfect information
How can governments influence resource allocation in the economy?
Through regulatory and discretionary policies
What is one of the ways governments can achieve the distributive function of the budget?
By redistributing income through taxation and public expenditure
Which action is NOT associated with the role of governments in correcting market failures?
Incentivizing monopolistic practices
Why should redistribution measures be accomplished with minimal efficiency cost according to the text?
To minimize deadweight losses or efficiency costs
What is the main goal of the Competition Act in India?
Promote competition and prevent anti-competitive activities
Why does the government intervene in income and wealth distribution?
To ensure a more socially optimal and egalitarian distribution
Which ideology put pressure on governments to play a redistributive role?
Socialist ideology
How does the government redistribute income and wealth through the budget?
Through the expenditure side or the revenue side of the budget
Why is it important for the government to intervene in income and wealth distribution?
To counter skewed distribution from the market
What is the distributive function of the budget concerned with?
Deciding 'for whom' an economy should produce goods and services
Test your knowledge on social welfare measures provided by egalitarian welfare states such as monetary aid, free education, subsidized healthcare, unemployment benefits, and social security measures.
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