5.1.1.2 - Redistribution Function of Government Budget
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Practice Questions
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Define personal income.
💡 Hint: Think about what income looks like after taxes.
What is the role of transfer payments?
💡 Hint: Consider where the money comes from.
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Interactive Quizzes
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What is personal disposable income?
💡 Hint: What do you have left after paying taxes?
True or False: The government’s taxation policy has no impact on household disposable income.
💡 Hint: Think about tax deductions.
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Challenge Problems
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If a government increases taxes from 20% to 25% on a household with an annual income of $50,000, calculate the change in disposable income.
💡 Hint: Calculate original and new tax amounts to find the difference.
A government decides to provide transfer payments of $5,000 to a low-income family. If this family's original disposable income was $30,000, what will their new disposable income be?
💡 Hint: Add the transfer payment to the original disposable income.
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