Answer to Question #119003 in Economics for Toretto Lord

Question

5. A decrease in which of the following will most likely change a Gini coefficient from 0.4
to 0.3?
A. Company tax rates
B. The goods and services tax rate
C. Marginal income tax rates for high income earners
D. Tax rates levied on the profits from the sale of property

Answer 1

5. A decrease in the goods and services tax rate will most likely change a Gini coefficient from 0.4

to 0.3, because people with lower income will spend lower part of their income on goods and services.

So, the correct answer is B.