CAIE A-Level Economics 3.3.4 Redistribution policies

CAIE A-Level Economics 3.3.4 Redistribution policies
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise judging how governments redistribute income and wealth through taxes, transfers, minimum wages and essential services.

How this is tested

  • compare progressive taxes, transfer payments and minimum wages as redistribution tools
  • explain why indirect tax rises or subsidy cuts may increase income inequality
  • assess short-run and long-run limits of redistributing income compared with wealth

Question 24

[Maximum number: 1]

What is the most likely reason for a government to introduce a progressive tax?

A

to discourage the consumption of a particular good

B

to distribute disposable income more evenly

C

to increase the disposable income of households

D

to reduce demand for healthcare services