Question

Which policies are useful to reduce inequalities of income?

• A. Monetary policies
• B. Public distribution policies
• C. Budgetary policies
• D. Foreign policies

Hint:

Progressive taxation and social security programs are key tools in budgetary policies to address income inequality.

Answer 1

The Correct Option is C

Step 1: Understanding the Role of Policies in Income Inequality:
Income inequality refers to the uneven distribution of income within a society. Various policies can help in reducing this disparity.
Step 2: Analyzing the Policies:
- Monetary policies: These are typically concerned with controlling the money supply and interest rates, which can indirectly affect income distribution but are not primarily focused on reducing income inequality.
- Public distribution policies: While these policies aim to provide essential goods to low-income households, they do not directly address the root causes of income inequality.
- Budgetary policies: Budgetary policies, including progressive taxation, social welfare programs, and government spending on education and health, are directly aimed at reducing income inequality by redistributing resources and providing support to low-income groups.
- Foreign policies: Foreign policies are concerned with a country's relations with other nations and do not directly impact domestic income inequality.
Step 3: Conclusion:
Budgetary policies are specifically designed to reduce income inequalities, making option (C) the correct answer.