There are a range of policies the government could use to income
inequality. These include:
1. Change the tax and benefit system
• increase the higher rate of income tax. This will make the tax system more progressive and will reduce the income of the top earners. The money could then be redistributed to the poorest
• cut the lower rate of income tax and increase the level of the tax-free allowance. This should reduce the poverty trap and encourage people to look for work
• reduce the availability of universal state benefits such as child allowance and switch towards more means tested benefits such as the EMA. This would save the government money and the money will go to those who need it most
• link benefits to average earnings instead of average prices.
2. Measures to reduce unemployment
• unemployment is one of the major causes of poverty. Therefore decreasing unemployment will decrease poverty
• the government have used special employment measures such as the new deal and the welfare to work programme to improve the job prospects of the unemployed
• regional policy assistance. The government can focus attention on areas of high unemployment and encourage firms to locate there.
3. Increasing the national minimum wage
• the NMW was introduced in 1999. It helps to increase the incomes of the low paid and also improve the incentive for people to find work.
marlinbito answered the question on July 6, 2018 at 18:39
- Explain what is meant by the distribution of income.(Solved)
Explain what is meant by the distribution of income.
Date posted: July 6, 2018. Answers (1)
- Using appropriate examples, explain some of the methods a government could use to increase the consumption of merit goods.(Solved)
Using appropriate examples, explain some of the methods a government could use to increase the consumption of merit goods.
Date posted: July 6, 2018. Answers (1)
- Explain what is meant by a merit good(Solved)
Explain what is meant by a merit good
Date posted: July 6, 2018. Answers (1)
- Critically examine the view that the government should not intervene in labour markets.(Solved)
Critically examine the view that the government should not intervene in labour markets.
Date posted: July 6, 2018. Answers (1)
- Analyse how labour markets might be affected by a decrease in the supply of migrant workers.(Solved)
Analyse how labour markets might be affected by a decrease in the supply of migrant workers.
Date posted: July 6, 2018. Answers (1)
- Evaluate the view that trade liberalisation alone is insufficient to ensure development of poorer countries.(Solved)
Evaluate the view that trade liberalisation alone is insufficient to ensure development of poorer countries.
Date posted: July 6, 2018. Answers (1)
- Explain the roles of the International Monetary Fund and the World Bank.(Solved)
Explain the roles of the International Monetary Fund and the World Bank.
Date posted: July 6, 2018. Answers (1)
- Critically examine the desirability of the world’s major economies introducing a system of fixed exchange rates.(Solved)
Critically examine the desirability of the world’s major economies introducing a system of fixed exchange rates.
Date posted: July 6, 2018. Answers (1)
- Explain the main reasons why nations engage in international trade(Solved)
Explain the main reasons why nations engage in international trade
Date posted: July 6, 2018. Answers (1)
- Explain the shape of a firm’s short-run average and marginal cost curves.(Solved)
Explain the shape of a firm’s short-run average and marginal cost curves.
Date posted: July 6, 2018. Answers (1)
- Critically examine some of the ways in which government can encourage businesses to be more environmentally friendly(Solved)
Critically examine some of the ways in which government can encourage businesses to be more environmentally friendly
Date posted: July 6, 2018. Answers (1)
- Explain why long-distance transport of fresh food may be an example of market failure.(Solved)
Explain why long-distance transport of fresh food may be an example of market failure.
Date posted: July 6, 2018. Answers (1)
- Explain how an economist could assess the efficiency of a market.(Solved)
Explain how an economist could assess the efficiency of a market.
Date posted: July 5, 2018. Answers (1)
- Evaluate the desirability of a total ban on price discrimination. (Solved)
Evaluate the desirability of a total ban on price discrimination.
Date posted: July 5, 2018. Answers (1)
- Explain why firms engage in price discrimination.(Solved)
Explain why firms engage in price discrimination.
Date posted: July 5, 2018. Answers (1)
- Explain why the cost of supplying a litre of tap water is likely to be lower than the cost of supplying a litre of bottled...(Solved)
Explain why the cost of supplying a litre of tap water is likely to be lower than the cost of supplying a litre of bottled water
Date posted: July 5, 2018. Answers (1)
- Critically examine the impact of increasing competition in the markets for electricity and gas.(Solved)
Critically examine the impact of increasing competition in the markets for electricity and gas.
Date posted: July 5, 2018. Answers (1)
- Explain the difference between natural and artificial barriers to entry.(Solved)
Explain the difference between natural and artificial barriers to entry.
Date posted: July 5, 2018. Answers (1)
- Analyse the likely impact of supply side policies upon a country’s rate of
unemployment.(Solved)
Analyse the likely impact of supply side policies upon a country’s rate of unemployment.
Date posted: July 5, 2018. Answers (1)
- Explain the difference between unemployment and economic inactivity.(Solved)
Explain the difference between unemployment and economic inactivity.
Date posted: July 5, 2018. Answers (1)