Answer to Question #105139 in Macroeconomics for Kg

Question #105139

Use the following quote from an article published by World Bank answer questions below
Before taxes and social spending, the income of the richest 10 percent in South Africa is more than 1000 times bigger than the poorest 10 percent. After taxes and social spending, this gap falls so that the income of the richest 10percent becomes 66times bigger than the poorest 10 percent..(World Bank)
A This is an example of
1monetary policy aimed to redistribute income
2monetary policy aimed to encourage economic growth
3fiscal policy aimed to redistribute income
4fiscal policy aimed to encourage economic growth
B The taxes referred to in the World Bank article satisfy which criterium of a good tax
1neutrality
2horizontal equity
3vertical equity
4administrative simplicity

Expert's answer

A - 3, fiscal policy aimed to redistribute income; B - vertical equity