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When a government offers unemployment benefits and also resorts to progressive taxation which function does it seem to fulfill?
A It is trying to establish stability in an economy
B It is trying to redistribute income and wealth
C It is trying to allocate resources to their most efficient use
D It is creating a source of market failure?
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When a government offers unemployment benefits and also resorts to pro...
Establishing Stability in the Economy
The government utilizes unemployment benefits and progressive taxation as tools to achieve economic stability.
  • Unemployment Benefits:
    • Provide a safety net for individuals who lose their jobs.
    • Stimulate consumer spending, which supports businesses and promotes economic growth.


  • Progressive Taxation:
    • Higher income earners pay a larger percentage of their income in taxes.
    • Reduces income inequality, leading to a more stable society.





Redistributing Income and Wealth
By offering unemployment benefits and implementing progressive taxation, the government aims to redistribute income and wealth effectively.
  • Unemployment Benefits:
    • Assist the unemployed, ensuring basic needs are met.
    • Help to reduce poverty levels and diminish income disparity.


  • Progressive Taxation:
    • Collects more from wealthier individuals to fund social programs.
    • Encourages equity by redistributing wealth to lower-income groups.





Conclusion
In summary, these measures primarily fulfill the function of redistributing income and wealth while also contributing to economic stability. They ensure that society functions cohesively, minimizing disparities and promoting overall economic health.
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Similar UPSC Doubts

Passage 2After the end of World War II, a pervasive, but unfortunately fallacious, economic perspective took hold. Based on the United States successful emergence from the Depression, the idea that war was good for an economy became fashionable. However, linking the United States economic recovery with its entry into World War II is a prime example offlawed economic thinking.Supporters of the war benefits economy theory hold that a country at war is a country with a booming economy. Industry must produce weapons, supplies, food, and clothing for the troops. The increased production necessitates the hiring of more people, reducing unemployment. More employment means more money in the pockets of citizens, who are then likely to go out and spend that money, helping the retail sector of the economy. Retail shops experience an increase in business and may need to hire more workers, further reducing unemployment and adding to the economic momentum. While this scenario sounds good in theory, it does not accurately represent what truly happens in a war time economy.In reality, the government can fund a war in a combination of three ways. It can raise taxes, cut spending on other areas, or increase the national debt. Each of these strategies has a negative impact on the economy. An increase in taxes takes money out of an individuals hands, leading to a reduction in consumer spending.Clearly, there is no net benefit to the economy in that case. Cutting spending in other areas has its costs as well, even if they are not as obvious.Any reduction in government spending means the imposition of a greater burden on the benefactors of that government spending. Cutbacks in a particular program mean that the people who normally depend on that program now must spend more of their money to make up for the government cuts. This also takes money out of consumers hands and leaves the economy depressed. Of course, a government could go into debt during the war, but such a strategy simply means that at some point in the future, taxes must be increased or spending decreased. Plus, the interest on the debt must be paid as well.Q. Which of the following situations best mirrors the effect that cutting spending in government programs has, as detailed in the passage?

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When a government offers unemployment benefits and also resorts to progressive taxation which function does it seem to fulfill?A It is trying to establish stability in an economyB It is trying to redistribute income and wealthC It is trying to allocate resources to their most efficient useD It is creating a source of market failure?
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When a government offers unemployment benefits and also resorts to progressive taxation which function does it seem to fulfill?A It is trying to establish stability in an economyB It is trying to redistribute income and wealthC It is trying to allocate resources to their most efficient useD It is creating a source of market failure? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about When a government offers unemployment benefits and also resorts to progressive taxation which function does it seem to fulfill?A It is trying to establish stability in an economyB It is trying to redistribute income and wealthC It is trying to allocate resources to their most efficient useD It is creating a source of market failure? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for When a government offers unemployment benefits and also resorts to progressive taxation which function does it seem to fulfill?A It is trying to establish stability in an economyB It is trying to redistribute income and wealthC It is trying to allocate resources to their most efficient useD It is creating a source of market failure?.
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