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Question 10
Outline and explain two ways in which government policies have affected the distribution of income in the UK.
Step 1
Answer
Government welfare policies, such as social security benefits, have aimed to redistribute income in the UK. For instance, social safety nets provide financial support to low-income families and individuals. By offering unemployment benefits and child benefits, the state helps to alleviate poverty and improve the living standards of those in need. This redistribution directly affects income distribution by providing resources to those who may otherwise struggle to make ends meet.
Step 2
Answer
Taxation policies also play a crucial role in affecting income distribution. Progressive taxation, for example, taxes higher income individuals at a higher rate compared to lower-income earners. This approach aims to reduce income inequality by redistributing wealth through government programs and services that benefit the broader population. Additionally, changes in tax policies can influence disposable income, thereby altering the distribution of income across different socioeconomic groups.
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