Question

How does public expenditure act as a tool for **redistribution of income and wealth?

• A. By increasing taxes on the wealthy and decreasing them for the poor.
• B. By investing in infrastructure projects that primarily benefit the rich.
• C. By providing social security, unemployment benefits, and subsidies to the poor.
• D. By funding luxury goods production which stimulates the economy for all.

Answer 1

Answer:

C. By providing social security, unemployment benefits, and subsidies to the poor.

• By taking from the rich (via progressive taxes) and providing services and benefits to the poor, public expenditure directly redistributes income and helps reduce economic inequality.