2.5 - Signposting

Question 1

The 4 Policies to Redstriute Income

Answer 1

• Transfer Payments
• Government spending on essential goods and services
• Governments could implement or adjust progressive taxation
• National Minimum Wage

Question 2

Evaluation: Transfer Payments

Answer 2

• Opportunity Cost Argument which could lead to intentionts not being met
• Distorts incentives making people more dependent

Question 3

Evaluation: Government Spending on essential goods and services

Answer 3

• Opportunity Cost Argument which could lead to intentionts not being met

Question 4

Evaluation: Governments could implent or adjust progressive taxation

Answer 4

• Laffer Curve argument (too high of a tax distorts incentives)

Question 5

Evaluation: National Minimum Wage

Answer 5

• Reduces Demand for Labour + Increases Supply leading to unemployment (Particularly if NMW is high)
• Unemployment has lots of costs that government may have to pay to deal with
• That goes against the very advantantage of the NMW, which was the fact that it takes strain off the fiscal budget