Question

Identify the incorrect statement from the following.

पर्याय

• A government budget is an annual financial statement showing item wise estimates of expected revenue and anticipated expenditure during a fiscal year.

• A government uses monetary instruments of taxation and subsidies with a view to improving the distribution of income and wealth in the economy.

• A government undertakes commercial activities that are of the nature of natural monopolies; and which are established and managed for the social welfare of the public.

• A government reduces the inequality in the distribution of income and wealth by imposing taxes on the rich and giving subsidies to the poor or spending more on the welfare of the poor.

Answer 1

A government uses monetary instruments of taxation and subsidies with a view to improving the distribution of income and wealth in the economy.

Explanation:

A government's budget demonstrates its entire taxes and subsidy policy. A government utilizes taxation and subsidies as fiscal instruments to improve the distribution of income and wealth in the economy. A government can reduce income and wealth disparity by levying taxes on the wealthy and providing subsidies to the poor, or by spending more on their welfare. It lowers the income of the wealthy while raising the living standards of the poor, resulting in a more equitable distribution of wealth.