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Explain how government budget can be used to influence distribution of income ? |
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Answer» The government through its budget and budgetary Policy. uses to influence the distribution of income by attempting to promote fair and right distribution of income in an economy. This is done through taxation and expenditure policy. On one hand, through its taxation policy, the government taxes the higher income group and on the other hand, through the expenditure policy (subsidies, transfer payments, etc.) it transfers the purchasing power in the hands of the poor sections of society. with the help of these policies, the government aims at fair distribution of income in the society. |
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