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Question : 15
Total: 19
Tax rates on higher income group have been increased. Which economic value does it reflect? Explain.
Solution:
Tax rates on higher group have been increased reflects that the government is following progressive tax policy. The purchasing power of the rich would fall while it would remain the same for the poor. This results in the reduction of inequalities in the distribution of income. And it also provide more resource to the government for spending on welfare of the poor.
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