The policies which are available to influence the distribution of income and wealth and to alleviate poverty
Governments use tools like progressive taxation and benefits to redistribute income and reduce poverty. Each policy shifts resources from higher earners toward those with lower incomes or wealth.
Formula
Transfer payments / Benefits-in-kind → net redistribution = tax revenue − benefit expenditure
Real World
The UK's Universal Credit system consolidates six legacy benefits into one payment, targeting the lowest-income households — by 2023, over 6 million people relied on it to top up wages or cover periods of unemployment.
Exam Focus
Name specific policies (progressive tax, minimum wage, Universal Credit) and link each directly to how it redistributes income for full marks.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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